Disney will launch a brand-new, advertisement-supported streaming service in the US in December, passing Netflix in the race for paid subscribers.
Early in July, the company reported 221.1 million subscribers across its three streaming services.
The business, which also owns the mainstream sports-focused Hulu and ESPN TV platforms, reported that demand for its Disney product is still very strong. Disney and other streaming services have benefited from pandemic lockdowns, but Covid appears to continue to draw in new customers despite the easing of its restrictions.
Much more than analysts had predicted, the company added 14.4 million Disney subscribers in the quarter, many of whom were from outside the US.
It will introduce a brand-new ad-supported service later this year, which will maintain the current $7.99 subscription price. The monthly fee for the service without advertisements is $10.99.
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Next year, the business intends to introduce its ad-supported service outside of the US. According to executives, long-term customer repulsion from price increases is not expected. According to the company, there is also a lot of interest from businesses looking to advertise the new service.
Race for paid subscribers
Bob Chapek, the company’s CEO, stated to analysts during a conference call to discuss the company’s financial results that “we are in a strong position with a record upfront offering.”.
Disney’s streaming division lost $1.11 billion in the quarter, which came at a high cost to subscriber earnings.
The peak in losses is anticipated for this year, executives said. In the meantime, a sharp increase in theme park guests following the worst of the pandemic has given the business plenty of financial breathing room. Profits reached $10.5 billion during the months of April through June, up 26% from the same period last year.
In the trading hours following the company’s release of its results, the company’s shares rose by more than 6%.
It was a “fundamental moment in the streaming wars,” according to PP Foresight analyst Paolo Pescatore, who claimed that Disney had more room for expansion than Netflix. The number of subscribers to Netflix has decreased by nearly one million in the most recent quarter, bringing the total to 220.67 million.
