The Rundown: Disney+ subscriber growth reaccelerates as Disney tops 196 million total streaming subscriptions

The key numbers:

• $21.8 billion in total revenue, up 34% year over year
• $7.7 billion in revenue from linear TV networks, flat year over year
• $4.7 billion in revenue from direct-to-consumer streaming services, up 34% year over year
• 129.8 million subscribers to Disney+, up 10% from the prior quarter
• 21.3 million subscribers to ESPN+, up 25% from the prior quarter
• 45.3 million subscribers to Hulu, up 3% from the prior quarter

The bundle builds

Disney has deployed a bundle strategy to step up against Netflix’s streaming dominance. In addition to operating three separate subscription-based streamers, the company also sells subscriptions bundling them together. 

Disney did not report how many of its 196.4 million total subscriptions are bundled subscriptions. However, during the earnings call, CFO Christine McCarthy said that the company has recorded two million incremental subscribers as a result of bundling Disney+ and ESPN+ with Hulu’s pay-TV service.

Headwinds ahead

The parallels between Disney’s and Netflix’s latest earnings reports extend beyond the subscriber growth upticks. Both companies are also trying to manage expectations for subscriber growth in 2022. However, while Netflix provided actual estimates for subscriber additions in the first quarter of this year, Disney’s executives were much more coy.

During Disney’s earnings call, McCarthy reiterated the company’s previously stated expectation that subscriber growth will not be linear. Having said that, she indicated the company does expect subscriber growth to be somewhat linear between the first and second halves of the company’s fiscal year, which runs through September. 

Disney expects streaming subscriber growth “in the back half of the fiscal year to exceed growth in the first half,” McCarthy said.

Despite the anticipated subscriber growth ups and downs, Disney is holding steadfast to its projection of reaching 230 million to 260 million Disney+ subscribers by the end of fiscal-year 2024, Chapek said.