Walt Disney eased concerns that the streaming video boom was running out of steam as it reported a strong rise in new subscribers to Disney Plus in its latest quarter and forecast that releases such as Obi-Wan Kenobi would bring in more viewers later this year.
Disney also reported a strong rebound from pandemic lows at its theme parks and resorts, where quarterly revenue totalled $7.2bn — higher than pre-pandemic levels and up from $3.5bn a year earlier.
Disney shares rose 8 per cent in after-hours trading after Bob Chapek, chief executive, said the company was on track to meet targets of 230mn-260mn subscribers to the Disney Plus streaming service by 2024.
Disney earned $1.06 a share in the first quarter, far higher than Wall Street’s estimates of 63 cents, and up from 32 cents a year ago.
Investors have grown concerned that the streaming market has started to plateau, especially in the US, after rapid growth during the pandemic. Netflix disappointed investors after warning last month that subscriber growth would slow substantially in early 2022.
But Disney Plus reported strong subscriber growth, adding 11.8mn new sign-ups in the quarter, as viewers paid to watch The Book of Boba Fett, The Beatles: Get Back and the animated film Encanto.
Total subscriber numbers stood at 129.8mn at the end of Disney’s first fiscal quarter, which runs to January 1 — well above analyst expectations of 125mn.
“We’ve had a very strong start to the fiscal year, with a significant rise in earnings per share, record revenue and operating income at our domestic parks and resorts . . . and a significant increase in total subscriptions across our streaming portfolio,” Chapek said.
He has placed Disney Plus at the centre of the company’s strategy and is spending billions on new content to attract subscribers globally. For all of its direct-to-consumer streaming services — which include Disney Plus, ESPN Plus and Hulu — operating losses rose 27 per cent to $600mn.
The bulk of the losses were at Disney Plus, though average monthly revenue per subscriber rose to $6.68 from $5.80 in the quarter.
Like its competitors, Disney is still working to revive its pipeline of films and TV programmes after the production disruptions caused by the Covid-19 outbreak.
Chapek said a number of releases later this year should boost subscriptions, including Pixar’s Turning Red, two Marvel series and two Star Wars series. It is also releasing a live action reimagining of Pinocchio starring Tom Hanks.
He said Disney continued “to see value in the moviegoing experience” in cinemas — especially with big franchise blockbusters — but added the company would continue to also debut films on its streaming services.
