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CFO: Bundling, India Drove Disney+ Q1 Sub Growth

With the Disney+ streaming service adding an impressive 11.7 million subscribers in the first quarter of 2022 (ended Jan. 1) from the fourth quarter of 2021 (ended Oct. 2, 2021), CFO Christine McCarthy, speaking on the media giant’s fiscal call, said the growth came from a variety of sources.

Specifically, the platform resumed paid subscriber acquisitions in India following a slowdown in Q4 when the company had to market directly with expired subs to get them to renew — as mandated by local law. Disney + Hotstar added 2.6 million paid subscribers to finish the period with 45.9 million.

Much of that growth is driven by Hotstar’s rights to the Indian Premier League cricket competition and significant collection of local content, including the addition of 18,000 hours of original programming anually. With renewal of rights coming up, Disney remains confident it can reach from 230 million to 260 million Disney+ subs by the end of fiscal 2024.

“That local content we’re developing really will mitigate the impact on us if we were not to win the [rights] auction on IPL,” McCarthy said.

Meanwhile, Disney’s new bundling strategy combining the SVOD and ESPN+ with the Hulu online TV option generated 2 million new subscribers. The platform also added 5.1 million international subs (outside of India) driven by growth in Asia Pacific and European markets. In the quarter, Disney+ launched operations in South Korea, Taiwan and Hong Kong.

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By comparison, Netflix increased Asia Pacific paid memberships by 2.6 million with strong growth in both Japan and India. It added 1.2 million North American subs — for a total of 8.3 million additions worldwide.

“Overall, we are pleased with Disney+ subscriber growth in the quarter and are looking forward to new market launches and a strong content slate later this year,” McCarthy said. “We don’t anticipate that subscriber growth will necessarily be linear from quarter-to-quarter, and we continue to expect growth in the back half of the fiscal year to exceed growth in the first half.”

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