Disney
The Mouse House reported overall growth in its third-quarter revenue from a year earlier, due in large part to a 70% bump in its parks and experiences category over last summer—from $4 billion to $7 billion—as travelers put pandemic concerns further in the rearview.
Disney’s Media and Entertainment segment showed modest growth year over year, thanks to the addition of 14 million Disney+ subscribers and the strength of live sports, which is the only TV category for which the company reported growth in ad revenue. Its linear channels, including ABC and ESPN, saw just over $7 billion in revenue, while its digital platforms—Disney+, Hulu and ESPN+—drew in $5 billion, which was offset by over $1 billion in operating costs via higher spending on programming across all three streamers.
Combined, Disney+, ESPN+ and Hulu now boast 221.1 million paid subscribers—sure to become a bragging right for the company given that Netflix reported a drop to 220 million subscribers last month. Disney also announced new pricing for its streamers with the advent of Disney+’s ad-supported tier, launching in December.
Addressing higher expenses as Disney expands its programming scope across streaming, specifically Disney+, Christine McCarthy, the company’s senior executive VP and chief financial officer, said on an investor call, “This is a peak year of losses, which includes those costs. But also we expect as we go into developing our full slate that [in] the next quarter you will see a similar increase year-over-year that you saw this quarter.”
Paul Verna, principal analyst at Insider Intelligence, told Ad Age via email that “Investors will breathe a sigh of relief” over Disney’s latest quarterly earnings. “The company significantly exceeded expectations on the all-important metric of Disney+ subscribers,” he said, adding the streamer’s numbers “will be seen as an indicator of the health of the market, especially after lackluster subscriber figures from Netflix and Comcast.”