As it surpasses Netflix in the battle for customers, Disney will introduce a brand-new ad-supported streaming service in the US in December.
As of 2 July, the company reported having 221.1 million subscribers across its three streaming channels.
It just edged out Netflix, which has been losing customers, in that position.
However, Disney issued a warning that the loss of cricket streaming rights in India will slow subscriber growth relative to earlier projections.
The company, which also owns the sports-focused ESPN+ and the general-audience television network Hulu, said that demand for its Disney+ offering was still robust.
Disney and other streaming services benefited from pandemic lockdowns, but it doesn’t appear like Covid is losing consumers as a result of the relaxation of its limitations.
In the third quarter, the firm gained 14.4 million Disney+ customers, significantly more than experts had predicted.
It will introduce a new advertising-supported service later this year, which will continue to be priced at the $7.99 monthly subscription level. The monthly fee for the ad-free subscription will increase to $10.99.
Next year, the company intends to introduce its ad-supported service outside of the US.
Executives stated that they do not anticipate long-term client repulsion as a result of the price increase. According to the company, there is also a lot of interest from businesses looking to advertise on the new service.
In a conference call to announce the company’s financial achievements, chief executive Bob Chapek said, “We are in a position of strength with record upfront advertising commitment.
Disney’s increases in subscribers have come at a high price; its streaming division lost $1.1 billion in the quarter.
The company has a sizable financial buffer because to a solid increase in theme park attendance since the worst of the epidemic, according to executives, who expect losses to peak this year.
Profits increased to $1.5 billion during the April–June time frame thanks to a 26% increase in total revenues.
After the company released its findings, shares increased by more than 6% in after-hours trading.
It was a “pivotal moment in the streaming battles,” according to PP Foresight analyst Paolo Pescatore, who said that Disney had more space for expansion than Netflix, its main opponent.
In the most recent quarter, Netflix lost roughly one million accounts, bringing its total number of subscribers to 220.67 million.
Disney, who counts each streaming platform subscription separately and counts users who pay for several services more than once, is only ahead of that.
According to Mr. Pescatore, “[The data] clearly reinforce my conviction that Disney is at a distinct phase of growth than Netflix.” “As it continues to enter new areas and put out new hit series, there are still millions more users to be acquired.”