Disney overtakes Netflix on streaming subscribers and sets higher prices

LOS ANGELES, Aug 10 (Reuters) – Walt Disney Co (DIS.N) has edged out Netflix Inc (NFLX.O) with a total of 221 million streaming customers and said it will raise prices for customers who want watch Disney+ or Hulu without ads.

The media giant will increase the monthly cost of ad-free Disney+ by 38% to $10.99 in December when it begins offering a new option that includes ads for the current price.

Shares of Disney rose 6.9% in after-hours trading to hit $120.15 on Wednesday.

Join now for FREE unlimited access to Reuters.com


In 2017, Disney staked its future on creating a streaming service to rival Netflix as audiences shifted to online viewing from traditional cable and broadcast television.

Five years later, Disney has overtaken Netflix in total streaming customers. The Mouse House added 14.4 million Disney+ customers, beating the 10 million consensus expected by analysts polled by FactSet, when the “Star Wars” series “Obi-Wan Kenobi” and “Ms. Marvel” by Marvel.

Combined with Hulu and ESPN+, Disney said it had 221.1 million streaming subscribers at the end of the June quarter. Netflix said it has 220.7 million streaming subscribers.

“Disney is gaining market share as Netflix struggles to add more subscribers,” Investing.com analyst Haris Anwar said. “Disney has even more room to grow in international markets where it is rolling out its service quickly and attracting new customers.”

To help attract new customers, Disney will offer an ad-supported version starting Dec. 8 for $7.99 per month, the same price it currently charges for the ad-free version, the company said.

Hulu’s prices will increase by $1 to $2 per month in December depending on the plan.

A smartphone screen displaying the ‘Disney+’ logo is seen in front of the words ‘streaming service’ in this illustration taken March 24, 2020. REUTERS/Dado Ruvic

The company on Wednesday lowered its long-term subscriber forecast for Disney+ customers, blaming the loss of cricketing rights in India.

Disney now expects between 215 million and 245 million total Disney+ customers by the end of September 2024. This is down from the 230 million to 260 million that Disney had forecast.

The adjustment came from lowered expectations for India, where the company is losing streaming rights for Indian Premier League cricket matches.

For the first time, Disney has released estimates for Disney+ Hotstar customers in India compared to the rest of Disney+.

Chief Financial Officer Christine McCarthy said Disney plans to add up to 80 million Disney+ Hotstar customers by September 2024, and between 135 million and 165 million more.

The company still expects its streaming TV unit to turn a profit in fiscal 2024, McCarthy said. In the last quarter, the division lost $1.1 billion.

For the fiscal third quarter ended July 2, Disney posted adjusted earnings per share of $1.09, up 36% from a year earlier, as guests filled its theme parks. Analysts polled by Refinitiv had expected a profit of 96 cents.

Operating profit more than doubled in the parks, experiences and products division to $3.6 billion.

Streaming losses weighed on the media and entertainment unit, whose profits fell 32% to nearly $1.4 billion.

Overall revenue rose 26% from a year earlier to $21.5 billion, ahead of analyst consensus of $20.96 billion.

Join now for FREE unlimited access to Reuters.com


Reporting by Lisa Richwine and Dawn Chmielewski in Los Angeles Editing by Kenneth Li, Peter Henderson and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

About Abraham Vernon

Check Also

Amy Cooper, Central Park Karen, Loses Lawsuit Against Ex-Employer

A federal judge has dismissed a case brought by Amy Cooper, the white woman who …