On February 4, the Walt Disney Company reported its fiscal first-quarter financial results. The corporation also offered an update on its Disney+ subscriber numbers. The service, which recently launched in November 2019, now has 28.6 million paid users. Though the subscription-video-on-demand (SVOD) platform costs the company hundreds of millions of dollars, it’s off to a healthy start.
Disney Earnings and SVOD Information
In the period ending December 28, Disney brought in $20.8 billion in revenue, an increase of 36 percent year-over-year. However, the corporation only generated $2.1 billion in net income, which represents a decline of 26 percent from 2018. The firm’s losses were driven by two factors, the underperformance of its 20TH Century Fox film slate and Disney+ launch costs.
In its financial reports, Disney recorded a loss of $693 million in its direct-to-consumer division, the part of the company responsible for Disney+. On the bright side, Bloomberg reports market analysts expected the service to cost the corporation $823 million in FQ1 2020.
Besides, the conglomerate’s significant financial investment has paid some dividends. Disney’s SVOD now has 28.6 million paid subscribers. That said, around 20 percent of the service’s users gained access to the platform via a Verizon promotional tie-in.
Last November, the entertainment corporation announced its streaming service garnered 10 million sign-ups on its first day. In January, Disney reported its SVOD app received more than 41 million downloads. Currently, new users can access the platform’s content via a 7-day free trial. Moreover, the firm said Disney+ generated $97.2 million in revenue.
The media giant views its streaming service as a long term investment. CEO Bob Iger said his company aims to have 60 to 90 million Disney+ subscribers by the end of the 2024 fiscal year. Also, the firm has a clear strategy in place to hits user acquisition goals.
Disney+ Expansion and Future Content Plans
At launch, Disney made its SVOD available in Canada, the Netherlands, and the United States. Soon after, the corporation opened the service up to users in Australia, New Zealand, and Puerto Rico. In March, the firm will expand Disney + into Austria, France, Germany, Ireland, Italy, Spain, Switzerland, and the United Kingdom.
In October, the House of Mouse will make its streaming service available in Latin America.
Given its wealth of legacy and original content, Disney+ should be able to significantly expand its subscriber count by the end of the year. The firm will likely grow its user base even further thanks to the release of more new TV shows.
On Super Bowl Sunday, Disney debuted the first footage from three new series set within the Marvel cinematic universe. The firm later revealed that “The Falcon and Winter Soldier” will launch its first season in August. Also, “WandaVision” will begin its inaugural run of episodes in December. The entertainment company also stated it would release a series revolving around “Thor” antagonist Loki next year.
As all three programs follow up on the events of the $2.79 billion grossing film “Avengers: Endgame,” they will undoubtedly attract a lot of eyeballs.
Bob Iger also noted that Disney+ would host the second season of the “Star Wars” spin-off “The Mandalorian” in October. As the program is the SVOD’s breakout offering, its return will drive new and renewed subscriptions in FQ4 2020.
Although Disney+ has a ways to go to become competitive with America’s biggest streaming services, it’s done very well so far. Moreover, with its international rollout and appealing content offerings, its future looks very bright.