In December, Disney will launch a new ad-supported streaming service in the United States, surpassing Netflix in terms of paid users.
At the beginning of July, the company recorded 221,1 million members across its three streaming channels.
This put it ahead of Netflix, which is losing customers.
However, Disney has cautioned that the loss of its streaming rights for cricket in India will lower its subscriber growth compared to previous projections.
The company, which also owns Hulu and ESPN+, reported that demand for its Disney+ offering remained robust.
Pandemic lockdowns provided a boost to streaming services such as Disney, but the relaxation of Covid restrictions does not appear to be hindering its ability to attract new subscribers.
The business added 14.4 million Disney+ users during the quarter, the majority of whom resided outside the United States – significantly more than experts anticipated.
It will offer a new ad-supported service later this year, for the same $7.99 monthly subscription fee. The monthly fee for the ad-free subscription will increase to $10.99.
The company intends to offer its ad-supported service beyond the United States in 2019.
Executives stated that they do not anticipate the price increase will discourage customers in the long run. According to them, the company is also receiving a great deal of interest from businesses wishing to advertise the new service.
On a conference call with analysts to review the company’s financial results, CEO Bob Chapek stated, “We are in a strong position with record-breaking upfront advertising commitments.”
Disney’s streaming unit posted a quarterly loss of $1.1 billion, despite the company’s subscriber gains.
In the interim, a robust resurgence in attendance at the company’s amusement parks since the worst of the pandemic has provided the company with a substantial financial cushion.
The company’s total revenues increased by 26% from April to June of the previous year, resulting in a profit of $1.5 billion.
The company’s shares increased by more than 6 percent in after-hours trading following the release of its findings.
PP Foresight analyst Paolo Pescatore termed it a “pivotal moment in the streaming battles” and stated that Disney has more room for growth than archrival Netflix.
In the most recent quarter, Netflix lost roughly one million accounts, bringing its total subscriber base to 220.6 million.
Mr. Pescatore stated, “[The statistics] confirm my notion that Disney is in a distinct growth phase than Netflix.” There are still millions of consumers to acquire as the company continues to enter new markets and release blockbuster shows.
