Disney Streaming Service Is Slowing Growth?

Disney+, a streaming service for Disney launched in November 2019, has shown good results, surpassing 10 million registered users on the first day of service. From 2020 to 2021, due to the impact of the COVID-19 pandemic, streaming services such as Amazon Prime Video and Netflix are said to be booming, and Disney+ is no exception, but it is pointed out that its growth is slowing.

Disney announced its Q2 earnings on May 14, 2021. As theme parks around the world are closing or restricting admission due to the impact of COVID-19, the focus of Disney’s business is shifting to Disney+, a streaming service. However, as of April 3, there were 103.6 million subscribers, down from analysts’ forecast of 19.3 million Disney+ subscribers in the first quarter. Also, in March 2021, Disney+ in the United States increased its price by $1 to $7.99 per month.

In addition, the average monthly revenue per subscriber also decreased, down 29% from the previous year to $3.99. However, Disney explains that the average monthly revenue per subscriber includes Disney + Hotstar, a cheaper service for India.

Disney CEO Bob Chepek and CFO Christine McCarthy emphasized that Disney+ is expected to reach 230 million to 260 million subscribers by the end of 2024. It is also reported that the cancellation rate due to the Disney+ price increase did not increase significantly. CEO Bob Chepek also expressed the view that new content will appear on the platform and subscribers will increase as film and TV production returns to normal once the COVID-19 period is over.

According to the announcement, Disney’s earnings per share for January-March 2021 rose by 79 cents, beating analysts’ forecast of 32 cents. Meanwhile, Disney shares have fallen 4% in after-hours trading since the announcement of the financial results. Related information can be found here.