Disney+ Delivers Better-Than-Expected Q4, Adds 26.5M Subs

Walt Disney's highly anticipated premium video subscriber results showed that Disney+ has a massive 26.5 million subscribers at the end of December 2019, higher than analysts' estimates of 20 million to 25 million.

Bob Iger, chairman/chief executive officer of Walt Disney, on CNBC said that 50% of its Disney+ subscribers came from its own website/digital platforms and 20% from a high-profile Verizon promotional deal, with the rest coming from other third-party services, Roku, Apple TV, and others.

Analysts estimated Disney+ could have gained as much as 10 million in subscribers from a Verizon promotion that gives its users a free initial year of Disney+. The retail price for Disney+ is $6.99 a month. 

Even with the promotion, Iger notes that the effective average rate-per-subscriber price was still good -- at an average $5.56/month for Disney+.



Disney+ launched in mid-November.

For Disney's direct-to-consumer (D2C) business Hulu -- its broad-based premium video streaming business -- its on-demand service added 6.1 million subscribers to total 27.2 million at the end of December 2019. Hulu Live TV + SVOD -- its live, linear pay TV package of networks -- added 1.7 million to total 3.2 million. 

One of the bigger surprises is that ESPN+ now totals 6.6 million subscribers -- a leap from 3.3 million in November 2019 and 1.4 million in December 2018.

Through February 3, Disney+ now has 28.6 million subscribers; ESPN+, 7.6 million.

Iger says the packaging of Disney+, ESPN+ and Hulu helped its overall subscriber results, especially in terms of keeping down its churn rate -- the rate at which a service loses subscribers. The package deal for the three Disney services is $12.99/month.

With regard to viewing on Disney+, Iger says its activity cannot be attributed just to its big TV series “The Mandalorian.” He says 65% of viewers who watched the series also watched 10 or more movies/TV series on Disney+.

Company-wide, Disney witnessed a 36% gain in revenues to $20.9 billion for its fiscal first-quarter 2020, which include Fox businesses after a deal that closed March 2019. Net income fell 23% to $2.15 billion. Operating income grew 9% to $4.0 billion.

After Tuesday market trading of Disney stock was down 0.7% to $143.70. The stock closed up 2.4% to $144.73.


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