MUMBAI: The Walt Disney Company (Disney) has witnessed a sharp fall in profit as a consequence of the Covid2019 pandemic. While the giant faced widespread disruption like many other organisations, it has one card in store: the newly launched streaming service Disney+. The streaming service is seeing a fast growth in subscribers, which now stands at 54.5 million as of 4 May. It seems shelter-in-place directive has worked in its favour as the service has added 21 million subscribers in less than two months.
Disney senior executive vice president and chief financial officer Christine M McCarthy said in an earnings call that since they continued launches in several markets between quarter end and 5 May, the subscriber number has also increased reaching 54.5 million. She also added the subscriber mix reflects the same as it did on 8 April when they announced that the service surpassed 50 million subscribers globally.
"At our direct-to-consumer international segment, operating losses were $427 million higher due to the cost incurred for the online launch of Disney+ around the world and consolidation of Hulu. Disney+ launched in the number of European markets in the world which contributed to a total paid subscriber base of 33.5 million at the end of the quarter and we are very happy with our successful rollout in Western Europe and India where we converted our pre-existing subscription base Hotstar service to Disney+Hotstar,” she added. In India, it already accounts for approximately eight million subscribers as per numbers shared last month.
The new Disney CEO Bob Chapek, for whom it was the first earnings, also expressed his ecstasy over the successful rollout in Western Europe and India. “We have been thrilled with the performance of Disney+. Since our initial launch in November, we have continued to expand in other markets. In late march as planned, despite Covid2019, we had an incredible launch in Western Europe followed by a highly successful launch in India,” he added. While in India it was scheduled to launch during the billion-dollar sports event IPL to exploit the Hotstar user base, it launched around scheduled time despite the suspension of the tournament.
“The Hotstar service in India was converted to Disney+ Hotstar, resulting in approximately eight million additional Disney+ paid subscribers. In general, wholesale arrangements have a lower average monthly revenue per paid subscriber than subscribers that we acquire directly or through third party platforms like Apple. In addition, the average monthly revenue per paid subscriber for Disney+ Hotstar is significantly lower than the average monthly revenue per paid subscriber in North America and Europe,” The Walt Disney Company said in a regulatory filing.
Disney’s overall average monthly revenue per paid subscriber for the second quarter stood at $5.63.
"As we will use our branded film and television content on the Disney+ service, we are forgoing certain licensing revenue from the sale of this content to third parties in TV/SVOD markets. In addition, we are increasing programming and production investments to create exclusive content for Disney+," it added in the regulatory filing.
Chapek added that the streaming service will begin rolling out in Japan in June, followed by Belgium, Luxembourg, Portugal in September and Latin America towards the end of the year. He promised that the vast collection of libraries in regional content available will continue to grow. He added that they will continue to make the planned investment that they always had into programming to drive subscription rate and retention.
