Disney+ Adds 7.9 Million Q2 Subs, Reaches 138 Million Globally

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.

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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.

Hulu + Live TV Adding Unlimited DVR

Hulu April 13 will introduce unlimited DVR to all Hulu + Live TV subscribers at no additional cost.

The upcoming launch follows the addition of access to Disney+ and ESPN+ as part of a Hulu + Live TV subscription.

“Hulu + Live TV is becoming even more valuable and attractive to consumers,” Joe Earley, president of Hulu, said in a statement. “Through one single subscription, users get access to 80-plus live channels — including all the major broadcast networks — as well as Hulu, Disney+, ESPN+, and soon Unlimited DVR. Guided by our relentless focus on delivering the consumer a high-quality user experience, we will be one of the only pay-TV providers — traditional or streaming — to offer this feature as part of the base plan at no additional cost.”

Unlimited DVR will allow on-demand playback and fast-forwarding capabilities on recordings for up to nine months. To date, Hulu + Live TV subscribers each received up to 50 hours of DVR storage, with an add-on option to upgrade to up to 200 hours for an additional monthly fee. Subscribers who previously purchased the Enhanced Cloud DVR add-on for $9.99 per month or Enhanced Cloud DVR + Unlimited Screens bundle add-on for $14.98 per month will transition to Unlimited DVR on April 13 and see a reduction in their monthly bills. New subscribers and existing subscribers that did not purchase any add-ons will automatically receive unlimited DVR as part of their Hulu + Live TV subscription at no additional cost.

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In addition to access to 80-plus live channels as well as Disney+ and ESPN+, Hulu + Live TV includes next-day network TV shows, originals and a library of on-­demand hit TV episodes and movies. With 4.3 million subscribers, Hulu + Live TV remains one of the largest DMVPDs in the United States, according to the service.

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.”

Ampere: Disney+, ESPN+, Hulu Top 100 Million Combined U.S. SVOD Subscribers

Disney topped 100 million U.S. subscribers to its streaming services for the first time in early Q4 2021, according to new data from Ampere Analysis. By the end of this quarter (ending Dec. 31), the “Disney bundle,” i.e., Disney+, Hulu and ESPN+, will further boost customer numbers.

Disney ended the third quarter with 179 million SVOD subs globally.

Disney topped 50 million U.S. subs in Q4 2019 following the launch of Disney+, and two years later hit 100 million, with both Hulu and Disney+ on track to finish the year in excess of 40 million subs.

ESPN+ is expected to finish 2021 with more than 20 million subs, nearly six times more than at the end of Q3 2019, before the launch of Disney+. Ampere estimates that the domestic client base of the three services will reach around 108 million subs by the end of the year, up from around 99 million at the end of Q3 2021.

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“A strong content portfolio from Disney+ and Hulu, making the most of its key Marvel and Star Wars franchises (on Disney+) and FX (on Hulu), as well as the continuation of live sports (on ESPN+) has further driven subscription growth this year,” Toby Holleran, research manager at Ampere, said in a statement.

Holleran said the strategy to incorporate Disney+ and ESPN+ subs — alongside Hulu — with Hulu online TV will further push the domestic sub base to around 108 million by the end of the year.

With media reports suggesting NBCUniversal is considering moving its content from Hulu to the Peacock streaming service in 2022, Holleran said Disney could still grow subs.

“The combination of attractive bundled pricing, alongside a strong slate of original content scheduled for release in 2022 across Disney+ and Hulu, [we] expect the combined suite to experience growth beyond 2021,” he said.

Disney Premier Access/PPV Revenue Jumped 70% to $933 Million in 2021

Disney made headlines when it generated $60 million in high-margin premium video-on-demand (or Disney+ Premier Access) revenue for the opening weekend box office release of Marvel Studios’ Black Widow.

Disney didn’t disclose further PVOD revenue until the Nov. 24 release of the media giant’s annual 10-K report. In the filing, Disney said it generated $933 million in revenue from the combined PVOD sales of Widow, Cruella, Jungle Cruise and Raya and the Last Dragon, in addition to 13 UFC pay-per-view bouts on ESPN+.

That was 70% higher revenue than the $550 million generated from the Premier Access debut of Mulan and 11 PPV UFC fights in the prior fiscal year.

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While Premier Access delivers Disney higher margins than other distribution channels, including theatrical, critics contend that PVOD undermines the movie’s theatrical potential — a mindset that led Black Widow star Scarlett Johansson to file a lawsuit against Disney alleging PVOD undermined her contractually mandated compensation. Johansson and Disney settled their disagreement out of court.

Disney CEO Bob Chapek said the studio would continue to explore concurrent theatrical/Premier Access releases in 2022, in addition to releasing movies in different channels depending on the movie and market conditions.

“We will always do what we believe is in the best interest of the film and the best interests of our constituents,” Chapek told investors in August.

Meanwhile, the motto “Go big or go home” appears to be Disney’s outlook for fiscal-year 2022 as it seeks to significantly ramp up spending on original content, sports rights and capital expenditures.

In line with the company putting most of its eggs into its direct-to-consumer businesses (i.e., Disney+, ESPN+, Hulu, Hulu + Live TV), Disney said it expects to spend upwards of $33 billion on original content, productions and live sports rights — up about 25%, or $8 billion from FY 2021.

In the report, Disney said the increased expenditures would be driven by higher spend to support “our DTC expansion” and “generally assumes no significant disruptions to production due to COVID-19.”

Disney will again dominate the 2021 domestic box office with five of the top 12 movies in ticket sales thus far, led by Shang-Chi and the Legend of the Ten Rings with $224 million. The Thanksgiving weekend release of animated movie Encanto is expected to add to the studio’s haul.

The top-grossing global theatrical release in 2021 remains China’s The Battle at Lake Changjin, the nationalist war drama that has generated an impressive $888 million at the largely Asian box office.

Hulu Partners With Uber Eats

Hulu has announced a partnership with Uber Eats allowing Hulu, Hulu (no ads) and Hulu + Live TV subscribers to receive six months of Eats Pass free ($9.99 per month after).

It’s the first time Uber has extended a membership offering to a streaming company, according to a Hulu release.

Eats Pass is a monthly subscription that offers unlimited free delivery on orders of more than $15 and 5% off eligible orders (including food and grocery). Subscribers also save 10% on their first three eligible rides each month.

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Eligible Hulu subscribers will receive an email with instructions directing them to sign up for this special offer, or they can visit HuluUberEatsPass.com. The offer will be available for redemption from Sept. 28, 2021, through Jan. 10, 2022, and is good for one Uber Eats Pass per Hulu account. The offer is available to new Eats Pass subscribers only.

Hulu Adds NFL Network to Live TV Channel Line-Up

NFL Network is now available to Hulu’s Live TV subscribers in the $64.99 a month subscription plan.

The addition of NFL Network to Hulu’s 75-plus live TV channel line-up  brings live NFL preseason games, exclusive live NFL regular season games, studio shows such as “Good Morning Football” and “NFL Total Access,” as well as “NFL GameDay Morning” and “NFL Now,” and original series such as “A Football Life,” “NFL 360” and “America’s Game.”

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Hulu has also launched a sports add-on featuring six sports networks with a collection of live games, recent highlights, sports news and events. For $9.99 per month, Hulu’s Live TV subscribers can add NFL RedZone, Outdoor Channel, Sportsman Channel, MAVTV Motorsports Network, TVG and TVG2 to their live TV line-up.

“With the launch of NFL Network and our new Sports Add-on, Hulu + Live TV continues to be the ultimate destination for sports fans to watch thousands of hours of live and on­demand sports programming,” Reagan Feeney, Hulu SVP of Live TV content programming and partnerships, said in a statement. “Starting today, viewers can bring even more game day action to their living room with live games and events, original shows, motorsports, horse racing and much more.”

“We are excited to bring NFL Network and NFL RedZone to Hulu + Live TV subscribers,” Hans Schroeder, EVP and COO of NFL Media, said in a statement. “One of our top priorities as a League remains broadening the distribution platforms for NFL content, and so we’re very pleased to bring our lineup of award-winning shows and live games to Hulu’s live subscribers.”

Comcast Adds Hulu + Live TV to Xfinity Flex

Comcast July 22 announced that its broadband-only Xfinity Flex subscribers now have access to Disney’s Hulu + Live TV, the largest online TV platform with more than 4 million subs.

Existing Hulu + Live TV subs can access their programming from within Flex’s existing Hulu app by saying “Hulu” into their Xfinity Voice Remote. After signing in with their credentials, they’ll have access to their full subscription — including dozens of live channels (and associated on demand programming) spanning sports, news, kids and entertainment, Hulu originals, exclusive series, and more. In the coming weeks, new customers will be able to sign-up for the service via their Flex devices.

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“The addition of Hulu + Live TV on Flex adds tremendous value for our internet customers, giving them access to more of their streaming content and subscriptions alongside a growing catalog of free programming — all seamlessly integrated into one voice-enabled and easy-to-navigate experience,” Rebecca Heap, SVP of video and entertainment for Comcast Cable, said in a statement.

Hulu + Live TV joins a growing list of linear streaming services available on Flex, including Xfinity Stream, Sling TV, Peacock, HBO Max, Paramount+, Xumo and Pluto.

Hulu + Live TV Adds Nine ViacomCBS Networks

Hulu + Live TV is adding nine ViacomCBS networks to its channel lineup, including Comedy Central, BET, Nickelodeon, Nick Jr, VH1, CMT, MTV, TV Land and the Paramount Network.

Subscribers will also have on-demand access to TV series titles such as “Freaks & Geeks,” “Moesha” and “Sister Sister.”

Monthly subscription pricing for Hulu + Live TV will remain at $64.99 per month.

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Five ViacomCBS networks — BETher, MTV2, NickToons, TeenNick and MTV Classic — will join Hulu’s entertainment add-on.

Hulu + Live TV offers more than 65 live TV channels, plus the core Hulu on-demand service (normally $5.99 per month as a standalone offering).

Hulu + Live TV Raising Monthly Fee 18%

With carriage fees (i.e. sports) increasing, Hulu + Live TV is passing the costs onto its online subscribers in the form of an 18% monthly price hike to $64.99 — up from the current $54.99 — and set to go into effect Dec. 18.

Hulu’s online TV platform added 1.2 million subs in the most recent fiscal period to end with 4.1 million subs — 1.8 million more than online TV pioneer Sling TV.

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The price hike is the the third in the past three years ($40 to $45 to $55) of Hulu’s online TV platform existence. The platform is now on par price wise with YouTube TV, AT&T TV and fuboTV. Sling recently raised its monthly fee to $30.