Disney+ added 7.9 million subscribers in the most recent quarter for a total of 138 million worldwide, the company announced Wednesday, helping it avoid the streaming slowdown that has plunged Netflix’s stock price of late.
Like most media companies, Disney shares have taken a hit following Netflix’s announcement last month that it had lost 200,000 subscribers in the first three months of the year and expected to lose 2 million more this quarter. After years of applauding media companies for losing billions on streaming, investors are now pressing to find a path to profitability.
The release of movies like Pixar’s “Turning Red” helped Disney+ attract subscribers in the first quarter, which ended on April 2. Disney shares rose about 4 percent in after-hours trading after the earnings announcement.
Disney’s results are good news for Bob Chapek, the CEO, who has been dealing with a public relations crisis stemming from the company’s response to Florida school legislation that, among other things, restricts classroom discussion. about sexual orientation and gender identity. (Disney is the largest private employer in the state.)
The company initially refrained from speaking publicly against the bill, but backed off after an internal revolt. Chapek then denounced the legislation, earning him the ire of conservatives, including Florida Governor Ron DeSantis. Last month, Republican lawmakers in Florida struck down a 1967 law that allowed Walt Disney World to function as its own quasi-government. In the wake of the uproar, Geoff Morrell, who joined Disney in January as its top government relations and communications executive, resigned last month.
Disney’s revenue rose 23 percent from a year ago to $19.2 billion but fell short of analyst expectations. Disney said it was hit by a decision to pull some of its content from other distributors in favor of its own channels, which meant a $1 billion reduction in licensing revenue as part of compensation to increase its direct-to-business. of consumption
Disney reported earnings per share of $1.08, below analysts’ expectations of $1.17.
Disney’s theme parks unit came back with a bang from a year ago, when the Covid-19 pandemic stunted in-person attendance. Revenue in the division doubled compared to the same period last year, with a new line break system driving the increases.
As streaming services look for more subscribers, India is emerging as a major market. Deep-pocketed media companies are preparing to bid for the rights to show cricket matches in the popular Indian Premier League. Disney currently holds the rights to broadcast the games on its Hotstar service, which it acquired in its 2019 mega deal with 21st Century Fox. Losing those rights could be a serious blow. However, Mr. Chapek has said that Disney can hit its subscriber goals even if it doesn’t retain those rights.
This is a developing story. Check back later for more details.