The Walt Disney Company reported earnings for its third quarter and nine months ended July 1, 2023, revealing that its flagship streaming service Disney+ now has 146.1 million, a 7.4% decline from the 157.8 million it reported in the prior-year quarter. Much of the drop came from India, where Disney lost broadcast rights to a popular cricket league.
Meanwhile, subscriber growth for ESPN+ and Hulu was also relatively flat compared to the previous quarter. In detail, ESPN+ subscriptions were about flat at 25.2 million, while Hulu’s 44 million SVOD subs were up from 43.7 million. Meanwhile, Live TV+ SVOD was 4.3 million, for a 48.3 million total Hulu.
Financially speaking, revenues for the quarter and nine months grew 4% and 8%, respectively. In particular, revenue for this quarter was US$22.33 billion, when analysts were expecting around US$22.5 billion. The Walt Disney Company also announced that the group expects to spend US$27 billion on content this year, partially due to the strikes.
“Our results this quarter are reflective of what we have accomplished through the unprecedented transformation we are undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business,” commented Robert Iger, Chief Executive Officer at The Walt Disney Company.
“In the eight months since my return, these important changes are creating a more cost-effective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of US$5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly US$1 billion in just three quarters. While there is still more to do, I am incredibly confident in Disney’s long-term trajectory because of the work we have done, the team we now have in place, and because of Disney’s core foundation of creative excellence and popular brands and franchises,” Iger added.
● DEMAND SHARE
The Walt Disney Company is still the market leader in corporate demand share, a good sign for longterm streaming health and short-term ability to ride out extended strikes by leveraging highly in-demand library content, Parrot Analytics said in its latest report. However, Disney+ has declined in streaming originals demand share both globally and in the United States for two consecutive quarters, coinciding with a dip in subscribers.
In detail, Disney+ stayed flat in on-platform demand share but lost a position to a surging Paramount+. Hulu’s share ticked down and it got leapfrogged by Max for second place in the category. That said, any future combination of Hulu and Disney+ onto the same service is poised to jump well ahead of Max and Netflix as the most in-demand platform with US audiences when it comes to total catalog, which includes both original and licensed movies and TV series, Parrot noted. Hulu is crucial to Disney’s ability to compete for adult audiences and stay among the top three streaming companies alongside Netflix and Warner Bros. Discovery.
Regarding corporate demand share, Disney once again leads the industry at 20.1%, up slightly from the previous quarter, reflecting a deep library of resonant content across its linear and streaming portfolios. Disney has been number one in this category since Parrot starting measuring it in 2018, but any hypothetical future M&A action involving Warner Bros. Discovery (17.6%), Paramount Global (12.2%) and NBCUniversal (9.8%) would likely result in the new corporate entity leapfrogging Disney for first place.