Variety: Disney+ Tops 150 Million Subscribers, Streaming Loss Narrows to $387 Million

Story from Variety:

Disney+ topped 150 million streaming subscriptions by the end of its fiscal fourth quarter of the year, up from 146.7 million in the previous quarter.

On Wednesday, Disney reported Core Disney+ subscriptions are at 112.6 million subs, as of the quarter ending Sept. 30, and the India-based Disney+ Hotstar is at 37.6 million.

These results come after a quarter that saw an exodus of 12.5 million Disney+ Hotstar subscriptions amid a strategy shift to move away from low-margin subscribers. The loss of key sports rights in the region also set the stage for significant churn on the Hotstar front.

Elsewhere in Disney streaming subs news, the quarter saw Hulu reach 48.5 million subscribers and ESPN+ up to 26 million.

Overall Disney’s streaming business lost $387 million in its Q4, a year-over-year improvement of 74% from a loss of $1.4 billion in the company’s Q4 2022.

The top performers on streaming for the quarter were Disney and Pixar’s film “Elemental” and movies “Guardians of the Galaxy Vol.3” and “The Little Mermaid,” which all debuted on Disney+ this summer.

During the company’s earnings call later Wednesday, CEO Bob Iger (who did an interview with CNBC just after the bell in which he said talks between SAG-AFTRA and AMPTP are happening “as we speak” to try to conclude the strike) said the company is currently in talks to license some of its content to Netflix, where it ended a previous output deal in 2017 but still continues to license select titles.

However, Iger says not to expect Disney to license its “core brands” to the competitor: “Those are real, obviously competitive advantages for us and differentiators. Disney Pixar, Marvel, Star Wars, for instance, all doing very, very well on our platform, and I don’t see why just to basically chase bucks we should do that when they are really really important building blocks to the current and future of our streaming business.”

Also on that call, interim CFO Kevin Lansberry said Disney now projects that content spend for 2024 will be $25 billion, down from $27 billion in 2023, a figure that itself was down $3 billion from the prior year.

Following a restructuring of financial reporting, Disney now breaks its three business segments into entertainment (film, TV and streaming), sports (which holds ESPN results) and experiences (theme parks and products).

Under the entertainment segment, which was up 2% year over year at $9.5 billion in revenue, linear networks revenue was down 9%, streaming revenue was up 12% and content sales and licensing dipped 3%. Sports was even with the comparable revenue from the year-ago quarter at $3.9 billion and experiences was up 13% at $8.1 billion revenue.

Wall Street forecast earnings per share (EPS) of 68 cents on $20.1 billion in revenue, according to analyst consensus data provided by Refinitiv. Disney reported diluted EPS of 82 cents on $21.2 billion in revenue.

“Our results this quarter reflect the significant progress we’ve made over the past year,” Iger said in a letter to shareholders. “While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again. We have a solid foundation of creative excellence and innovation built over the past century, which has only been reinforced by the important restructuring and cost efficiency work we’ve done this year, and we’re on track to achieve roughly $7.5 billion in cost reductions. Combined with our portfolio of valuable businesses, brands and assets – and the way we manage them together – Disney has a strong hand that differentiates us from others in our industry. As we look forward, there are four key building opportunities that will be central to our success: achieving significant and sustained profitability in our streaming business, building ESPN into the preeminent digital sports platform, improving the output and economics of our film studios, and turbocharging growth in our parks and experiences business. We have already made considerable advancements in these four areas and will continue to move forward with a sense of purpose and urgency, and I’m bullish about the opportunities we have before us to create lasting growth and increase shareholder value.”

Disney stock closed Wednesday at $84.49 per share. The regular U.S. stock markets will reopen Thursday at 9:30 a.m. ET.