The Rundown: Disney+ tops 152 million subscribers, but growth slows in the U.S.

The key numbers:

• $21.5 billion in total revenue, up 26% year over year
• $7.2 billion in revenue from linear TV networks, up 3% year over year
• $5.1 billion in revenue from direct-to-consumer streaming services, up 19% year over year
• 152.1 million subscribers to Disney+, up 10% from the prior quarter
• 22.8 million subscribers to ESPN+, up 2% from the prior quarter
• 46.2 million subscribers to Hulu, up 1% from the prior quarter

Disney+

Disney+’s global subscriber additions in the latest quarter outstripped each of its main rivals that break out quarterly subscriber numbers. Whereas Disney+ added 14.4 million subscribers in the period, Netflix lost 970,000 subscribers; Warner Bros. Discovery added 1.7 million subscribers across HBO, HBO Max and Discovery+; Paramount+ added 3.7 million subscribers and Peacock stayed flat.

However, in the U.S., Disney+ did run into a subscriber slowdown. The streamer only added 100,000 domestic subscribers in the period, compared to the 1.5 million U.S. subscribers it added in the previous quarter.

Disney+ ad-supported tier and price increase

Not so coincidentally, on the same day it reported the U.S. subscriber slowdown, Disney announced the launch date and pricing for its upcoming ad-supported tier, which is supposed to help the company gain cost-conscious subscribers. However, the ad-supported tier’s pricing may not so much help Disney gain subscribers as keep its existing subscribers, who may be unwilling to agree to the service’s impending price increase. 

Disney+ Basic will debut on Dec. 8 and cost $7.99 per month, which is how much Disney+’s ad-free tier currently costs. With the addition of the ad-supported tier, the ad-free tier’s price will increase to $10.99 per month, which could cause people to cancel their subscriptions, especially if the economic downturn persists. However, “we do not believe there is going to be any meaningful long-term impact on our churn as a result” of the pricing increase, Chapek said during the earnings call.

Disney+ subscriber growth forecast

Disney updated its subscriber guidance for Disney+. Previously, the company said it expected Disney+’s subscriber base to be between 230 million and 260 million subscribers by the end of its fiscal-year 2024. Now, the company is separating its projections for its core Disney+ service and its Disney+ Hotstar service, which is aimed at the Indian market. 

Disney expects to have 135 million to 165 million core Disney+ subscribers by the end of fiscal-year 2024, which Disney finance chief Christine McCarthy said during the earnings call was “largely consistent with previously provided guidance.” Meanwhile, Disney+ Hotstar is expected to have up to 80 million subscribers by the end of fiscal-year 2024, which appears to mark a 15 million-subscriber downgrade from the previous projection. The downward revision likely has to do with Disney losing streaming rights for the Indian Premier League.

Broader subscriber slowdown

Disney+ isn’t the only one of Disney’s streaming services to see subscriber growth ebb. Hulu turned in another quarter of 1% sequential subscriber growth, and ESPN+’s subscriber growth subsided a bit from 5% in the previous quarter to 2% in the latest one.

Furthermore, Hulu’s streaming pay-TV service lost subscribers for another quarter. After losing 200,000 subscribers in the first three months of 2022, Hulu’s pay-TV service shed another 100,000 subscribers in the most recent three-month period.