Disney+ gains 12 million subscribers, but losses accumulate

Disney+ gains 12 million subscribers, but losses accumulate

(FILES) In this file photo taken on September 9, 2022 fans are reflected in the Disney+ logo during the Walt Disney D23 Expo in Anaheim, California.  - Streaming service Disney+ saw subscriber numbers jump by 12 million users compared to June, results showed Tuesday, as the three-year-old service continues to defy a sour economy.  (Photo: Patrick T. FALLON / AFP)

(FILES) In this file photo taken on September 9, 2022 fans are reflected in the Disney+ logo during the Walt Disney D23 Expo in Anaheim, California. (Photo: Patrick T. FALLON / AFP)

WASHINGTON, United States – The Disney+ streaming service saw its subscriber numbers jump by 12 million users compared to June, results showed on Tuesday, as the home of “Obi-Wan Kenobi” and “Black Panther” continued to defy a sour economy.

The profit beat analysts’ expectations, but the California-based group’s streaming services, which include Disney+, ESPN+ and Hulu, more than doubled its year-on-year operating losses to $1.47 billion for the July-September period, the results said.

The number of people subscribing to Disney+ reached 164.2 million people, more than the 161 million estimated by Factset, a data company.

But this was offset by the big financial loss for Disney’s flagship streaming service which faces a wall of rivals, including industry leader Netflix and its 223 million subscribers worldwide.

Walt Disney Co. Chief Executive Bob Chapek said that building the streaming business had required “significant investment” and that the service was now suffering “peak operating losses, which we expect to decline going forward.”

Disney+, hot on the heels of Netflix, is about to launch a cheaper but ad-supported subscription offering to attract even more viewers but also diversify its revenue stream.

Disney’s version launches on December 8 for $7.99 a month, while the basic ad-free subscription jumps to $10.99.

The company said in August that it hopes Disney+ will break even by 2024 and is counting on upcoming releases such as “Black Panther: Wakanda Forever” and “Avatar: The Way of Water” to fuel subscription numbers.

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Sales and earnings for the entertainment group as a whole were below analysts’ expectations and shares in Disney fell a whopping 7.9 percent in late trading after the results were published.

In an earnings call, Chapek pointed to record results at the parks, experiences and products division, which includes the company’s theme parks and cruise lines.

It saw revenue jump more than 36 percent to $7.4 billion from a year earlier, riding a tourism wave after restrictions due to the Covid-19 pandemic were eased.

The company said its merchandising licensing business also did well, primarily due to higher sales of products based on Mickey and Friends, Encanto and Toy Story.

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