Hulu provided a boost to Disney’s direct-to-consumer business but the segment still saw its operating losses expand due to Disney+ and ESPN+.
During the company’s fiscal fourth quarter, direct-to-consumer revenues increased 38% to $4.6 billion but operating loss increased from $0.4 billion to $0.6 billion.
The increase at Hulu was due to advertising and subscription revenue growth. Hulu + Live TV added 300,000 subscribers during the quarter to bring its total back up to 4 million and a recent rate hike helped the virtual MVPD raise its average monthly revenue per paid subscriber (ARPU) 18% to $84.89. Hulu grew its SVOD-only subscriber base to 39.7 million.
Meanwhile, Disney+ saw a significant deceleration in growth—as the company previously forecast—and added just 2.1 million new subscribers during the quarter. The service also saw its ARPU drop slightly from the second quarter down to $4.12.
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The company attributed the higher losses at Disney+ increased programming and production, marketing and technology costs, which were partially offset by rate increases and Premier Access revenues from “Black Widow” and “Jungle Cruise.”
ESPN+ added approximately 2 million subscribers during the quarter and raised its ARPU to $4.74. Disney said its sports streaming service’s results were dragged down slightly by higher marketing and sports programming costs.
“As we celebrate the two-year anniversary of Disney+, we’re extremely pleased with the success of our streaming business, with 179 million total subscriptions across our DTC portfolio at the end of fiscal 2021 and 60% subscriber growth year-over-year for Disney+. We continue to manage our DTC business for the long-term, and are confident that our high-quality entertainment and expansion into additional markets worldwide will enable us to further grow our streaming platforms globally,” said Disney CEO Bob Chapek in a statement.