Disney touts 73 million Disney+ subscribers amid tumultuous year
Disney's stock skyrocketed after market close Thursday when the company reported better-than-expected subscriber additions for its streaming service Disney+, offsetting losses in the company's studios, parks and resorts divisions.
Yes, but: Revenue fell 23% from this time last year to $14.7 billion and the company's profits disappeared. Still, the losses weren't as bad as investors anticipated and the company saw a boost from some successes in the reopening of sports and engagement in its broadcast network, ABC, around the election.
Why it matters: Thursday marks the one-year anniversary of the launch of Disney+. The company kicked off the direct-to-consumer service to compete with the likes of Netflix and Amazon Prime. At the time, Disney couldn't have imagined that the service would keep the company from financial collapse amid the pandemic.
Details: At of the end of the quarter on Oct. 30, Disney reported that Disney+ had more than 73 million subscribers. At its launch last November the company said its goal was to reach 60 million-90 million paid subscriptions by 2024.
- "It has quickly exceeded our highest expectations," said Disney CEO Bob Chapek.
- Disney+ is now available in more than 20 markets. On Tuesday, it will launch in Latin America, including Chile, Brazil, Mexico and Argentina.
- Disney+ will expand to more overseas markets in the coming year, Chapek said, and the company plans to launch a direct-to-consumer general entertainment offering via its Indian network which it got in 2019 via its Fox acquisition.
- Chapek said there's more room to grow its subscription business.
Be smart: Disney, like many of its entertainment rivals, reorganized its media and entertainment business around streaming this October.
- Chapek said the new structure, which separates content creation from distribution, better aligns the company toward streaming.
The big picture: Disney, like many companies in the travel and tourism industry, said it was "very encouraged" by news earlier this week of progress around a COVID-19 vaccine.
- While the company's parks and resorts abroad in places like China and at home in Florida have now reopened with new safety measures, its Disneyland Park and resort in California remains closed.
- Chapek noted that the company is "extremely disappointed [the] state of California continues to keep Disneyland closed."
- He pointed to the company's track record of reopenings globally, as well as its work facilitating safe NBA games through its Disney World "bubble," as examples that the company can and should be able to reopen safety.
- Still, Chapek says production has begun to ramp up. "We now have more than 100 scripted projects in live production," he said."
- He anticipates Disneyland will remain closed until the end of the fiscal first quarter, or Dec. 31 and expects theatrical results to be down significantly unpaired to this time last year.
What's next: Disney will provide an update on global subscriber numbers at its annual investment conference on Dec. 10. The company says it now has more than 120 million paid subscribers worldwide for its bundled streaming package, which includes Disney+, ESPN+ and Hulu.