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In this illustration taken on March 24, 2020, a smartphone screen showing the “Disney+” logo is shown in front of the words “Streaming Service.” (Reuters)
The Walt Disney Co. overtook Netflix Inc with a total of 221 million streaming customers and announced it would raise prices for customers who want to watch Disney+ or Hulu without ads.
The media giant will increase the monthly cost of ad-free Disney+ by 38% to $10.99 in December, when it will start offering new options including ads at current prices.
Disney shares rose 6.9% to $120.15 in after-hours trading on Wednesday.
Disney bet its future in 2017 Building a streaming service to rival Netflix As viewers shift from traditional cable and broadcast television to online viewing.
Five years later, Disney has surpassed Netflix in total streaming customers. The Mouse House is releasing the “Star Wars” series “Obi-Wan Kenobi” and Marvel’s “Ms. Marvel.”
Adding Hulu and ESPN+, Disney said it had 221.1 million streaming subscribers at the end of the June quarter. Netflix says it has 220.7 million streaming subscribers.
“While Netflix is ​​trying to add more subscribers, Disney is gaining market share,” said Investing.com analyst Harris Anwar. “Disney still has more room to grow in international markets, where it’s rolling out services quickly and adding new client.”
To help attract new customers, Disney will offer an ad-supported version starting Dec. 8 for $7.99 a month, the same price as the ad-free version now, the company said.
According to the plan, the price of Hulu will increase by $1 to $2 per month in December.
The company on Wednesday cut its long-term subscriber forecast for Disney+ customers, blaming the loss of Indian cricket rights.
Disney now expects total Disney+ customers to be between 215 million and 245 million by September 2024. That was lower than Disney’s previous forecast of 230 million to 260 million.
The adjustment comes from lower expectations for India, which is losing streaming rights to Indian Premier League cricket matches.
Disney estimates Disney+ Hotstar customers in India with other Disney+ customers for the first time.
CFO Christine McCarthy said Disney expects to have 80 million Disney+ Hotstar customers by September 2024, and 135 million to 165 million other customers.
McCarthy said the company still expects its streaming TV unit to be profitable in fiscal 2024. In the most recent quarter, the unit lost $1.1 billion.
In the fiscal third quarter ended July 2, Disney reported adjusted earnings of $1.09 per share, up 36% from a year earlier, as tourists packed the theme parks. Analysts polled by Refinitiv had expected earnings of 96 cents.
Operating income in the Parks, Experiences and Products segment more than doubled to $3.6 billion.
Streaming losses weighed on the media and entertainment division, whose profits fell 32% to nearly $1.4 billion.
Total revenue rose 26% from a year earlier to $21.5 billion, beating analysts’ expectations of $20.96 billion.
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