Disney said on Wednesday it added 14.4 million subscribers to its Disney+ streaming service in the April-June fiscal quarter, putting it just ahead of Netflix in the streaming wars with about 221 million total streaming subscriptions.
Netflix ended June with 220.7 million subscribers after losing nearly one million subscribers last quarter.
The Walt Disney Co. also said Wednesday it was raising prices for U.S. streaming subscribers who want to watch Disney+ ad-free as more viewers switch to what CEO Bob Chapek described as “the best value in streaming.”
The price increases are tied to a new tiered service that Disney will launch in December for subscribers in the US. The basic Disney+ service today costs $7.99 ($10.21 Cdn) per month. Starting in December, this basic service will run ads, so a subscriber who doesn’t want ads will have to upgrade to the premium service, which starts at $10.99 ($14.04 Cdn) per month, a 37.5% increase over current prices. An annual plan will cost $109.99 ($140.52 Cdn).
It’s unclear if the subscription price will change in Canada, where Disney+ costs $11.99 per month or $119.99 per year.
“We expect the ad tier to be popular and we expect some people to want to go ad-free,” Chief Financial Officer Christine McCarthy said on a conference call with analysts.
Netflix’s most popular US streaming plan is now $15.50 ($19.80 Cdn) per month, and its best plan is $20 ($25.55 Cdn) per month. That follows several rate hikes to help pay for original programming, which became even more important after Disney pulled its programming and classic movies from Netflix after licensing agreements between the companies expired.
Disney said paid Disney+ subscriptions were up 31 percent, much of it internationally, from the same time last year. But revenue growth was not as strong due to operating losses from “higher programming and production, technology and marketing costs.”
Disney beat earnings expectations
Disney’s surging sales of its streaming services, which include Hulu and ESPN+, combined with a rebounding theme park business after closures during the pandemic led the Burbank, California-based entertainment giant to beat Wall Street expectations with quarterly earnings on Wednesday.
Disney reported revenue of $21.5 billion in the three months to July 2, up 26% from the same time last year.
Disney reported that sales in its Parks, Experiences and Products segment rose to $7.39 billion (C$9.4 billion), up 70% from $4.34 billion (C$5.5 billion ) a year earlier. The numbers represent a continued rebound from the COVID-19 restrictions that temporarily closed all Disney parks in 2020, reduced capacity for most of 2021 and continued to affect some locations such as Shanghai Disneyland, which was only open for three days in April- June quarter.
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