Disney+ is slaying the streaming wars, hitting 94.9 million subscribers less than 14 months since its launch.
According to The Walt Disney Company’s Q1 earnings report on Thursday, Disney+ added 8.1 million subscribers in December alone — a feat largely credited to original series The Mandalorian and Pixar film Soul.
“We thought [releasing Soul on Christmas Day] was a really nice thing to do for our consumer base, and our subscriber base, given the holiday and given the fact that we have talked consistently about remaining flexible in terms of how we’re going to go ahead and put our titles out into the marketplace,” said Disney CEO Bob Chapek on the earnings call. “We were absolutely thrilled by what that brought to our business in terms of both acquisition and retention.”
Disney+ has been vital in keeping the company afloat, as Disney reported $29 million profit in this quarter, down 99% from $2.1 billion last year. The decline is due in large part to the shut downs and capacity reductions at Disney parks during the pandemic.
Disney+ attracted 10 million subscribers within a day of its launch in November 2019. The entertainment giant initially hoped its streaming platform would hit 90 million subscribers by the end of 2024.
In comparison, it took Netflix nearly a decade to reach the same milestone. Netflix still reigns supreme over streaming services, with more than 200 million global subscribers.
Although Disney+ is surging in subscribers, average revenue per user was down 28% from the year prior. Indian streamer Hotstar, which Disney acquired as part of its purchase of 20th Century Fox assets in March 2019, is partly to blame. One of the deals for the Disney+ Hotstar bundle includes a Disney+ subscription at under $2 per month, much less than the service in other markets.
As Disney+ becomes stickier among consumers, it’s raising its prices. Disney+ is increasing its monthly price in March from $6.99 to $7.99 (or $69.99 to $79.99 per year) to make up for decreasing ARPU. The Disney+, Hulu and ESPN+ bundle will also increase by $1, to $13.99 per month.
Disney’s other streaming services, Hulu and ESPN+, also surged in 2020. Hulu ended the year with 39.4 million subscribers, a 20% increase year over year, with Hulu Live bringing in 4 million subscribers. ESPN+ reached 12.1 million subscribers, an 83% increase from the year before.
Disney’s total subscriber count clocks in at 146 million.
Disney attributed the growth of its streaming ad business to Hulu subscribers, as a majority are signed up for the ad-supported plan.
“That is where we have seen really nice growth of our addressable advertising,” said Disney CFO Christine McCarthy on the earnings call. “We like the mix that we have, but it is more ad-supported so we enjoy that relative increase of advertising. The track record that Hulu has of having that relationship of ad-supported versus ad-free has been relatively consistent over their 10-year tenure.”