The company’s total sales rose 23 percent in the past quarter to $19.25 billion.
(Photo: AP)
new York In contrast to Netflix, the domestic competitor Walt Disney has the streaming machine running at full speed. The number of subscribers had risen to 137.7 million, the US group announced on Wednesday after the US stock market closed.
In the second business quarter alone at the end of April, almost eight million viewers were persuaded to take out a subscription. That was well above expectations. The stock gained more than 3 percent in after-hours trading. Company boss Bob Chapek said with a view to the streaming numbers that one was “in a class of its own”.
Disney only entered the streaming business in November 2019 and has been catching up quickly since then – including with series from the Star Wars universe such as “The Book of Boba Fett” and soon “Obi-Wan Kenobi”. By the end of the 2024 financial year, the group wants to reach 230 to 260 million subscribers. Disney is becoming a “real threat” to Netflix, said Shahid Khan, a partner at technology consultancy Arthur D. Little.
Industry pioneer and leader Netflix has recently felt a certain fatigue and even lost customers in the first three months of the year – for the first time in more than ten years. This fueled concerns that the corona-related boom among streaming providers could come to an end.
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In addition to Netflix and Disney, Amazon, Apple and Paramount, among others, are also investing heavily to attract viewers who want to regularly stream new series and films at home.
The content decides
“We’ve reached a point of streaming saturation,” commented Forrester analyst Mike Proulx. “Consumers have a limited amount of time and money to spend on the ever-growing streaming services. Ultimately, consumers will follow the content.” And this is where Disney has strong material on offer, including the “Star Wars” and “Marvel” brands.
According to Forrester data, 51 percent of US adult users of a streaming service remain subscribers because they don’t want to miss out on exclusive content. “A constant stream of new content is critical to retaining subscribers,” concludes Proulx.
Sophie Lund-Yates, senior equities analyst at Hargreaves Lansdown, also believes Disney’s streaming offering can continue to grow, unlike its competitor Netflix. Disney’s “classics that slumber on the digital shelves are timeless and, above all, cash cows that can be retrieved again and again,” she explains.
Less-expensive subscription plans that include advertising, like the ones Disney plans to introduce this year, could help retain subscribers even in a recession when consumers’ household incomes come under pressure, Lund-Yates said. In addition, Disney has made “phenomenal progress” in the area of theme parks, despite the slump in international visitor numbers in the wake of the corona pandemic – and with admission prices of up to $ 1,200 for multi-day experiences.
Disney’s total revenue rose 23 percent to $19.25 billion in the quarter just ended. The clear plus was also due to the amusement parks, which cashed in. Profits, on the other hand, almost halved to $470 million, which was partly due to tax increases.
The Disney Group will be 100 years old next year. In addition to the amusement parks and the film business with the streaming offer, Disney also owns cruise ships and various television channels.
With material from Reuters.
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