The Walt Disney Co. May 11 said it added 7.9 million Disney+ subscribers in the second quarter (ended April 2). The streamer ended the period with almost 138 million subscribers worldwide, which includes 50.1 Hotstar subscribers in India.
The streamer, combined with ESPN+ and Hulu and Hulu + Live TV, brings Disney’s direct-to-consumer bundle to almost 206 million subs, up from 196.4 million during the previous-year period.
Specifically, Disney+ added 7.1 million North American subs, to bring the region’s total to 44.4 million, up from 37.3 million in the previous-year period. Internationally (excluding Hotstar), Disney+ added 12.1 million subs to bring its overseas base to 43.2 million, compared with 31.1 million a year ago.
ESPN+ added 9 million subs to reach 22.8 million, up from 13.8 million last year. Hulu ended the quarter with 41.4 million subs, up from 32.8 million subs in the prior-year period. Hulu + Live TV, Disney’s online TV streaming platform, finished the quarter with 4.1 million subs, up from 3.8 million subs a year ago.
“Our strong results in the second quarter … once again proved that we are in a league of our own,” CEO Bob Chapek said in a statement. “Quite simply, we believe Disney+ is one-of-a-kind streaming service.”
At the same time, direct-to-consumer business increases also result in increased costs. Segment revenue for the quarter increased 23% to $4.9 billion, and operating loss increased $600 million to $900 million. The increase in operating loss was due to higher losses at Disney+ and ESPN+ and lower operating income at Hulu.
Lower results at Disney+ reflected higher programming and production, marketing and technology costs, partially offset by an increase in subscription revenue. Higher subscription revenue was due to subscriber growth and increases in retail pricing. The increases in costs and subscribers reflected growth in existing markets and, to a lesser extent, expansion to new markets.
Lower results at ESPN+ were due to higher sports programming costs and a decrease in income from Ultimate Fighting Championship (UFC) pay-per-view events, partially offset by an increase in subscription revenue due to subscriber growth. Lower UFC pay-per-view income was due to a decrease in average buys per event.
The decrease at Hulu was due to higher programming and production, marketing and technology costs, partially offset by subscription revenue growth and higher advertising revenue. The increase in programming and production costs was primarily due to higher subscriber-based fees for programming the live-TV service due to the carriage of more networks, an increase in the number of subscribers and rate increases. Subscription revenue growth was due to an increase in subscribers and higher average rates, primarily due to increases in retail pricing. The increase in advertising revenue was due to higher rates and impressions.