Disney’s Q1 Hotstar India Subscriber Loss Offsets Disney+ Global Sub Gains

The Walt Disney Co. Feb. 8 disclosed it lost 3.8 million Disney+ Hotstar subscribers in India in the first quarter (ended Dec. 31, 2022), from the previous fourth quarter (ended Oct. 1, 2022) offsetting Disney+ subscriber gains in North America and worldwide. It was the first-ever subscriber loss for Disney+ since launching in November 2019.

Disney+ ended the quarter with 161.8 million global subscribers, down from 164.2 million subs at the end of October 2022. North America added 200,000 subs to end the period with 46.6 million subs, while international markets (excluding India) added 1.2 million subs to end the period with 57.7 million.

CFO Christine McCarthy said the December Disney+ domestic price increase has been playing out as expected, with only modestly higher subscriber churn (subs not renewing), which she said could negatively impact the fiscal second quarter. That impact, in addition to slower than previously expected growth in some international markets, suggests core Disney+ subs may grow only modestly in Q2 at a similar pace to the first quarter, according to McCarthy.

“As we have said before, sub growth will vary quarter-to-quarter, and we expect to see higher core subscriber growth towards the end of the fiscal year,” she said.

ESPN+ added 600,000 subs to end the quarter at 24.9 million, while Hulu added 700,000 subs to end the period at 43.5 million. Hulu + Live TV added 100,000 subs to end the period with 4.5 million.

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Overall, Disney’s direct-to-consumer business segment increased revenue 13% to $5.3 billion from $4.69 billion, while the operating loss increased $500 million to $1.1 billion. The increase in operating loss was due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+.

Specifically, Disney+ programming and production costs increased almost 83% to $1.68 billion, from $920 million in the previous-year period. Hulu costs increased almost 15% to $2.1 billion, from $1.83 billion. ESPN+ costs declined almost 8% to $395 million, from $427 million.

Disney claims its DTC business will be profitable by fiscal year 2024.

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