Disney+ Vastly Outpaces Expectations With 28.6 Million Subscribers, ESPN+ Also Sees Strong Growth

“We had a strong first quarter, highlighted by the launch of Disney+, which has exceeded even our greatest expectations,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “Thanks to our incredible collection of brands, outstanding content from our creative engines and state-of-the-art technology, we believe our direct-to-consumer services, including Disney+, ESPN+, and Hulu, position us well for continued growth in today’s dynamic media environment.”

At the end of Q1 2020, Disney+ subscribers were up to 26.5 million, versus the expectation of only 20 million. As of Monday, February 3, Disney+ subscribers rose to 28.6 million, representing a growth of 2.1 million subscribers in only December 28, 2019.

ESPN+ subscribers rose to 6.6 million and Hulu to 30.4 million (27.2 million for video on demand and 3.2 million for live tv). Disney thanks the partnership of UFC for the rapid growth of ESPN+ which saw 1 million PPV purchases and 500,000 subscribers added for the Conor McGregor fight.

The average price paid for Disney+ was $5.56 a month in Q1 2020, ESPN+ decreased from $4.67 to $4.44 from Q1 2019. Direct-to-Consumer & International revenues for the quarter increased from $0.9 billion to $4.0 billion and segment operating loss increased from $136 million to $693 million.

The increase in operating loss was due to costs associated with the launch of Disney+, the consolidation of Hulu and a higher loss at ESPN+. These increases were partially offset by a benefit from the inclusion of the TFCF businesses due to income at the international channels including Star. 4 The increase in operating loss at ESPN+ was primarily due to higher programming costs, primarily for Ultimate Fighting Championship (UFC) rights, and an increase in marketing spend, partially offset by subscriber revenue growth and UFC pay-per-view fees.

Commencing March 20, 2019, as a result of the acquisition of a controlling interest in Hulu, 100% of Hulu’s revenues and expenses are included in the Direct-to-Consumer & International segment.

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