According to industry analysts, Walt Disney Company’s quarterly results show signs of a quarter of a billion new subscribers. However, the analysts are not so confident that launching the streaming service outside the US will increase its profits.
On Thursday, Walt Disney’s stock fell nearly 5 per cent to US$99.95 per share in pre-market trading, following the company’s second-quarter results.
Disney+ surpassed Wall Street’s estimates, but the costs of the streaming service left some investors and analysts unimpressed.
According to the analysts, the streaming service added more subscribers than Netflix but lost a lot of money in the process.
Richard Greenfield, LightShed Partners media and technology analyst, said, “Disney added more subscribers than Netflix; however, they lost a lot of money. Wall Street is increasingly focused on profits.”
The streaming service ended March with 138 million subscribers, which increased by 7.9 million from the previous quarter.
Furthermore, the streaming service is launching in 42 countries this quarter, expanding its global reach to 106 countries.
According to CEO Bob Chapek, Disney+ is well on track to reach the company’s target of 230 – 260 million subscribers by the end of September 2024.
However, the analysts indicate that more than half of its quarterly subscriber increase came from Disney+ Hotstar in India, where subscribers pay US$0.76 per month. Upon launching in South Africa, subscribers will pay US$7.73 on average. In the US, customers pay US$6.32
Also, operation losses for Walt Disney’s streaming business, which includes ESPN+ and Hulu, increased to US$877 million.
Operational costs are expected to increase in the third quarter by more than US$900 million as the company invests in more original content and sports rights.
“We believe that great content will increase our subscribers, and those subscribers will drive our profitability,” said Chapek.