The company reached 116 million subscribers in the quarter ending July 3, double the 58 million it attracted a year ago, and above the 115 million Wall Street analysts were after.
By comparison, Netflix added just 1.5 million subscribers in the same quarter, losing some 430,000 customers in the United States and Canada and fueling concerns about its vulnerability to new competition.
Bob Chapek, chief executive of Disney, said the company was in a “strong position” despite the “current challenges of the pandemic”. Disney shares jumped 5.3% in after-hours trading. The stock was roughly flat over the year, missing a larger market rally.
Disney quickly signed up subscribers to its streaming service, helped by a cheaper monthly price and the launch of its Hotstar platform in India. However, subscribers pay significantly less money on average than competing services like Netflix. Disney Plus average revenue per user fell 10% from a year ago to $ 4.16 in the quarter, with India now accounting for nearly 40% of all subscriptions.
Netflix’s senior management has ruled out any threats from Disney and its peers. Co-CEO Reed Hastings told investors last month he had not seen Disney impact on Netflix subscriber growth. “Is HBO or Disney. . . have a different impact compared to the past? We do not see this in the [data], ” he said. “It reassures us. “
Disney theme parks offered another bright spot in the quarter, with the reopening of sites in the United States, China and France, helping the company to post an operating profit after heavy losses the last year. The company’s parks and consumer products business reported operating income of $ 356 million in the quarter on sales of $ 4.3 billion.
As the pandemic dragged on, Disney and other Hollywood studios experimented with releasing big movies on their streaming services alongside theaters – a move that sparked a lawsuit against actor Scarlett Johansson last month.
Chapek defended Disney’s decision on Thursday, telling investors that the company’s film release strategy reflected a “very uncertain world” and Black WidowThe distribution of helped the film “reach the widest audience”.
During the quarter, Disney streamed movies, including Cruel, an origin story reinvented live for 101 Dalmatians, and Luca, a coming-of-age Pixar film set in Italy.
However, Disney is still losing money on streaming as it invests heavily in content and technology to increase signups. Disney’s direct-to-consumer business unit, which includes Disney Plus, Hulu and ESPN Plus, recorded an operating loss of $ 293 million on revenue of $ 4.3 billion.
In total, Disney posted a net profit of $ 923 million on $ 17 billion in revenue, with sales up 45% from a year ago when it was hit by the pandemic.