Disney rebounds, realigns, and refocuses.
Disney recently reported fiscal Q4 earnings, highlighted by subscriber growth across all three streaming platforms and beating most analyst estimates. Disney+ grew by 7m customers to 150.2m globally (46.5m domestically, up 500k), Hulu was up +300k users to 48.5m, and ESPN+ grew by 800k users to 26m. Direct to consumer revenue was up 12% to $5.04 billion, and losses were trimmed year over year by almost a billion dollars to -$420 million. CEO Bob Iger attributed the gains to price increases and subscriber growth, while also including cost savings from marketing, technology, and distribution costs.
2024 total content spend is projected to be around $25 billion, down about $2 billion from earlier estimates, with about 40% allocated for sports and 60% to entertainment. Iger also announced that a beta version of the Hulu-Disney+ combo will arrive in December, with full implementation complete by the end of March 2024. The combined service should reach profitability by the end of 2024, Iger said. Disney+ with Hulu is currently available for $9.99 with ads and $19.99 without ads.
The Circana Take:
- Streaming has shifted from a grow-at-all-costs strategy to a steadier “quality over quantity” model. While licensing content is not off the table, tentpole IP like Pixar, Star Wars, and Marvel will stay exclusive to Disney+.
- Disney’s AVOD service is growing, the Comcast buyout is underway, direct-to-consumer ESPN should come to fruition in 2024, and Disney+ (with Hulu) is expected to become profitable in 2024. Given the positive outlook for 2024, managing expectations (and achieving these results) will be key going forward.