As Netflix registers a drop in its number of subscribers for the first time in ten years, Disney+ exceeds its objectives for the quarter. The mouse ready to overthrow the Red N?
Launched in November 2019, the Disney+ platform is having no trouble making its mark on the busy SVOD market. With only two years of existence on the counter, the offer of the firm with big ears is already beginning to approach the results of the current leader. As Netflix registers a decline in its number of subscribers for the first time in ten years, Disney+ continues to impose itself in homes around the world.
At the time of the balance sheet, the firm recorded growth above its quarterly objectives. In April 2022, it managed to convince 7.9 million users; allowing it to go beyond the 130 million subscribers worldwide. It currently has precisely 137.7 million users. Figures still far from those of the firm of Reed Hastings, but which proves that its growth is not ready to stop.
With all of its offerings, including Hulu, Disney+, HotStar and ESPN+, the company enjoys a broad community of 205.6 million subscribers. A strike force that obviously questions its ability to establish itself as the leader in the sector. Bob Chapek assured that the objective of exceeding 230 million subscribers in September 2024 was entirely achievable.
A profitable strategy
At a time when cinemas were closing their doors due to a pandemic, Disney made the controversial choice to offer its feature films on its platform. A strategy that had caused the discontent of cinema operators, but which seems to have been rather profitable for the platform. Moreover, the Pixar films that skipped the cinema box have undoubtedly largely contributed to the success of the platform.
It should also be remembered that in the United States, platforms can benefit from a revision of the exclusivity window for dark rooms. Movies released in theaters can be streamed via SVOD 45 days after release. This is how Disney + subscribers were able to discover Encanto during the end of year celebrations. However, it is difficult to know whether Moon Knight will have contributed to these good results, the series not having been released on screens until after the end of the quarter.
But not necessarily profitable…
All is not rosy for all that in the country of Mickey. If the company has reason to rejoice with this exponential growth, the financial results worry Wall Street. To become a leader in the sector, the firm aligns the zeros, even if it means endangering its profitability. Direct consequence: the action fell by 3% after the announcement of its results.
Analysts interviewed by Market Screener agree that if “Disney+ got more subscribers than Netflix, they lost a lot of money getting there. Wall Street is increasingly profit driven.”
Disney + does not however intend to reduce the airfoil on production and acquisition. The firm’s spending on this component should increase by $900 million in the next quarter, particularly for investment in original content and sports rights.
Bob Chapek, the company’s CEO, continues to believe that this strategy will set it apart from the competition. “We believe great content will drive our bottom line.”
It now remains to be seen whether the new Disney+ productions will have the expected effect on its growth. The arrival of the series Obi-Wan Kenobi already promises to make a stir and attract many fans of the license. Note also that another Marvel series is due to land this summer, this time centered on a teenager with extraordinary powers. Miss Marvel will be broadcast from next june 8. Obi-Wan Kenobi disembark the May 27 with the first two episodes.
For its part, Netflix is already planning to lose 2 million subscribers additional this next quarter. The firm seems to have reached the peak of its growth, while the markets to conquer are becoming fewer.
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