While still behind Netflix, Disney Plus is growing quickly as more people are staying home.
What you need to know
- Disney announced its Q4 fiscal quarter earnings, with a slight gain in revenue.
- Disney Plus grew its total paid subscriber base to 73 million.
- Some divisions saw a loss in revenue related to the global effects of the pandemic.
Disney reported its fiscal fourth-quarter earnings today, which boosted growth in some areas and losses in others. Shares were up as much as 6% for the company though, as losses were not as deep as expected. To start, there was a loss per share of only 20 cents versus the expected 71 cent loss. Additionally, Disney reported slightly higher revenue than the expected $14.2 billion, coming in at $14.71 billion.
Disney Plus was a winner, with a total of 73 million subscribers, up from the previous quarter's 57 million, and closing in quick on the goal of 90 million by 2024. An unspecified number of customers were likely attained through promotions, such as Verizon's "Disney+ on Us" which offers a free year to customers on select unlimited plans. Some of those may end up leaving the service in late November, when the year-long promotion ends.
Along with Hulu and ESPN streaming services, which Disney also owns, that puts the company at just over 120 million paid streaming subscribers, closing the gap between Netflix's slowing subscriber base of 195 million.
As theaters were widely closed for safety, Disney's Studio Entertainment division was a 52% drop in revenue to $1.6 billion. Last year Disney had a few blockbusters out such as Aladdin, Captain Marvel, and of course Avengers: Endgame. The most recent release was Mulan, which suffered from poor reception and being forced into a largely digital-only release on Disney Plus for a premium fee. Still, the company's Direct-to-Consumer and International division managed a 41% year to year increase with $4.85 billion in revenue, while Media Networks was also up 11% year over year, securing $7.21 billion.
Disney estimates that pandemic-related costs caused a $2.4 billion hit on the company. Park closures caused an 85% decrease in revenue during the previous quarter. As of Q4, the Parks, Experiences, and Products division is down 61% year over year, and it's estimated that pandemic-related costs will reach $1 billion in 2021. And while many of the parks reopened, such as Walt Disney World in Orlando, Florida, Disneyland park in California remains closed, something CEO Bob Chapek is not too pleased with:
Frankly, as we and other civic leaders have stated before, we believe state leadership should look objectively at what we've achieved successfully at our Parks around the world, all based on science, as opposed to setting an arbitrary standard that is precluding our cast members from getting back to work.
His comments come just as the U.S. is reporting its highest daily recorded cases since the start of the pandemic.
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