Disney today reported its fiscal third-quarter earnings which were highlighted by Disney+ hitting 116 million total subscribers, ahead of the 112.8 million consensus on Wall Street.
The new total is just more than double the 57.5 million subscribers Disney+ had at the end of the year-ago quarter. While average revenue per user for the service continued to decline year over year—from $4.62 to $4.16—it saw a sequential improvement. Disney+ pegged its year over year ARPU decline on Hotstar but said the sequential improvement was due to a rate hike in March and fewer wholesale subscribers.
ESPN+ ended the quarter with 14.9 million subscribers and ARPU at $4.47, up 7% year over year due to an increase in retail pricing and higher per-subscriber advertising revenue. Hulu grew its SVOD-only subscribers to 39.1 million but Hulu + Live TV lost another 100,000 subscribers during the quarter, taking its total down to 3.7 million. Hulu’s SVOD-only ARPU rose from $11.39 to $13.15 due to higher per-subscriber advertising revenue and a lower mix of wholesale subscribers.
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“We continue to introduce exciting new experiences at our parks and resorts worldwide, along with new guest-centric services, and our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platforms,” said Disney CEO Bob Chapek.
The company’s direct-to-consumer revenues for the quarter rose 57% to $4.3 billion while operating loss scaled down from $0.6 billion to $0.3 billion. The decrease in operating loss was due in part to Hulu’s subscription revenue growth and higher advertising revenue. Subscription revenue growth was due to an increase in subscribers and a December 2020 rate hike for the Hulu + Live TV.
Losses widens for Disney+ due to higher programming and production, marketing and technology costs, which was partially offset by higher monthly rates and Premier Access revenue for “Cruella” in the current quarter.