Disney+ Tops 54.5 Million Subs as Video Biz Balloons Revenue — and Costs

The Walt Disney Co’s aggressive move into over-the-top video distribution through Disney+, Hulu+ and ESPN+ continues to generate market share, revenue and costs.

Speaking on the May 5 fiscal call, CFO Christine McCarthy said Disney+ topped 54.5 million paid subscribers through May 4.

Disney’s Direct-to-Consumer and International revenue for the second quarter (ended March 28) increased from $1.1 billion to $4.1 billion, while the operating loss increased from $385 million to $812 million. The increase in operating loss was due to costs associated with the launch of Disney+ and the consolidation of Hulu (from co-owner Comcast).

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Disney+ ended the quarter with 33.5 million paid subscribers, which increased to 50 million subs in May after international launches. Hulu ended the quarter with more than 32 million subs.

Notably, Disney forwent $1.5 billion in revenue when it opted to direct select movies and TV shows to Disney+ and Hulu. That compared with revenue of $252 million in the previous-year period and $41 million in Q1.

The eliminations of segment operating income in the current quarter were due to sales of studio titles to Disney+ driven by Frozen II, The Lion King, Toy Story 4 and Aladdin and sales of ABC Studios and 20th Century Fox Television titles to Hulu.

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Results for the quarter also reflected a benefit from the inclusion of the 20th Century Fox businesses due to income at the international channels, including Disney+ Star.

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