Disney will introduce a brand-new, advertisement-supported streaming service in the US in December as it overtakes Netflix in the battle for paying customers.
Across its three streaming channels, the company claimed 221.1 million users at the beginning of July. It just edged out Netflix, which has been losing customers, in that position. Disney beats Netflix as was expected.
However, Disney issued a warning that the loss of cricket streaming rights in India will slow subscriber growth relative to earlier projections.
The company, which also owns the sports-focused ESPN+ and the adult television streaming service Hulu, claimed that demand for its Disney+ offering was still high.
Disney and other streaming services benefited from pandemic lockdowns, but it doesn’t appear like Covid is losing consumers as a result of the relaxation of its limitations.
More than experts had predicted, the firm attracted 14.4 million Disney+ customers in the quarter, many of whom were located outside of the US.
It will introduce a new advertising-supported plan later this year, which will maintain the existing monthly price of $7.99. The cost of the service will increase to $10.99 per month. The business intends to introduce its ad-supported service outside of the US the following year.
In the long run, executives said they do not anticipate customers being turned off by the price increase. Companies looking to advertise the new service are also showing a lot of interest, according to the business.
Disney’s increases in subscribers have come at a high price; it’s streaming division lost $1.1 billion in the quarter. The company has a sizable financial buffer because of a solid increase in theme park attendance since the worst of the epidemic, according to executives, who expect losses to peak this year.
Profits increased to $1.5 billion during the April–June time frame thanks to a 26% increase in total revenues. After the company released its findings, shares increased by more than 6% in after-hours trading.
It was a “pivotal moment in the streaming battles,” according to PP Foresight analyst Paolo Pescatore, who said that Disney had more space for expansion than Netflix, its main opponent.
In the most recent quarter, Netflix lost roughly one million accounts, bringing its total number of subscribers to 220.67 million. Making the Disney beats Netflix statement believable.