Disney in “+++” mode, ahead of Netflix in streaming

Disney as a master of “entertainment”, or at least of streaming! This is what emerges from quarterly data issued Thursday evening, after the close of Wall Street. More than the results themselves, it is the dynamic in the recruitment of new subscribers to the subscription content distribution platform, Disney+, which was on investors’ radars.

On this point, the American group did not disappoint, quite the contrary. For its third fiscal quarter, Walt Disney saw the number of subscribers to its streaming services climb to 221 million, thus exceeding (by very little but still…) the 220.7 million customers of the major competitor Netflix. Understand by this the users of Disney+, launched in November 2019 and the main contributor to the total, i.e. 152.1 million subscribers (far beyond the 147 million targeted by analysts), as well as those of Hulu (focused on the cinema and co-owned with Comcast, however a passive shareholder, 46.2 million) and ESPN+ (specialized in sports, 22.8 million).

Nothing to do, therefore, with the poor performance of Netflix which, in mid-July, announced that it had seen 970,000 of its subscribers slip away during its second quarter, although this loss was reduced from the 2 million initially expected. In the third quarter, ie for the months of July to September, the group estimates that it will be able to attract one million new customers. That’s good, but it’s still below analysts’ expectations, which were more for 1.84 million additional subscribers over the period.

Continuous demand in leisure parks

On the stock market, the momentum of Disney + is welcomed, the action climbing more than 7% at the start of the session on Thursday after a gain of nearly 4% yesterday. The lowering of the objective for the number of “core” subscribers, i.e. the platform’s basic portfolio, by 2024, to the range of 215 to 245 million, against 230 to 260 million, mainly due of a slowdown in the American market, is relegated to the background. Note that the pricing policy will be declined, with, from December, a price of 7.99 dollars per month for the formula with advertising, and 10.99 dollars for the version without advertising.

More generally, it is all of the accounts for the second quarter that are appreciated by the operators. Over the three months, the group’s turnover increased by 26% to 21.5 billion dollars, against 20.96 billion expected by the consensus, for a net profit per share of 1.09 dollars, beyond of the anticipated 96 cents. With post-pandemic ridership returning, the theme parks and cruises division saw revenue rebound more than 70% to $7.4 billion. In this activity, the demand remains higher than the supply of places and many do not manage to obtain reservations, indicated Christine McCarthy, the chief financial officer of Disney. Spending per customer increased by 10%.

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