Disney Overtakes Netflix On Streaming Subscription Battle
Disney has topped Netflix with a total of 221 million streaming customers at the end of the June quarter.
The media giant has said it will raise the monthly cost of Disney+ without advertising by 38% to $10.99 in December when it begins to offer a new option that includes ads for the current price.
Shares of Disney rose 6.9% in after-hours trading to $120.15 on Wednesday.
In 2017, Disney staked its future on building a streaming service to rival Netflix as audiences moved to online viewing from traditional cable and broadcast television.
Five years later which is now, Disney has edged past Netflix in total streaming customers. The Mouse House added 14.4 million Disney+ customers, beating the consensus of 10 million expected by analysts polled by FactSet, as it released the “Star Wars” series “Obi-Wan Kenobi” and Marvel’s “Ms. Marvel.”
According to the firm, to help attract new customers, Disney will offer an ad-supported version starting on Dec. 8 for $7.99 a month, the same price it now charges for the ad-free version.
Prices for Hulu will rise by $1 to $2 per month in December depending on the plan.
However, the company lowered its long-term subscriber forecast for Disney+ customers on Wednesday, blaming the loss of cricket rights in India.
Disney now projects between 215 million and 245 million total Disney+ customers by the end of September 2024. That is down from 230 million to 260 million which Disney had been forecasting.
The adjustment came from reduced expectations for India, where the company is losing streaming rights for Indian Premier League cricket matches.
For the first time, Disney broke out estimates for Disney+ Hotstar customers in India from the rest of Disney+.
Chief Financial Officer Christine McCarthy stated that Disney expected to add up to 80 million Disney+ Hotstar customers by September 2024, and between 135 million and 165 million others.
The company still expects its streaming TV unit to turn a profit in fiscal 2024, McCarthy said. In the most recent quarter, the division lost $1.1 billion.
Paolo Pescatore, an analyst at PP Foresight, referred to it as a “pivotal moment in the streaming wars” saying Disney had more room to grow than arch-rival Netflix.
Netflix lost nearly one million accounts in the most recent quarter, putting its subscriber total at 220.67 million.
He added, “I firmly underline my belief that Disney is at a different phase of growth to Netflix and there are still millions of users to acquire as it continues to expand into new markets and rolls out new blockbuster shows.”