Disney’s shares were up more than 6 percent after Wednesday’s closing bell after the company’s streaming numbers proved that the global market streaming market is far from reaching saturation. The company’s streaming platform Disney plus reported subscriptions of 152.1 million in the fiscal third quarter, exceeding analysts’ estimate of 147 million, according to StreetAccount.
Other streaming platforms have been struggling with keeping their subscribers and remaining profitable but Disney’s numbers show that all is going well with its streaming category. Following its report, Disney also announced a new pricing structure that incorporates an ad-supported Dinsey plus and this is part of an effort to ensure that its streaming business remains profitable.
Disney, like others, was affected by increased costs. The average revenue per user for its streaming business declined by 5 percent in the US and Canada in the fiscal third quarter as more customers are going after cheaper multiproduct offerings. Disney plus subscription fee for its ad-supported tier will be $7.99 per month while its ad-free tier will be $10.99 starting December 8th. Its ad-free tier is currently priced at $7.99.
Disney reduced its 2024 forecast for Disney plus to between 215 million and 245 million subscribers, down 15 million from its former forecast range. The former range was between 230 million and 260 million. The country also reiterated that it expects Disney plus to be profitable by the end of its fiscal 2024 year.
Disney reported earnings per share of $1.09 per share compared to the expectation of 96 cents that analysts had expected, according to Refinitiv. Revenue for the fiscal third quarter came in at $21.5 billion compared to analysts’ forecast of $20.96 billion, according to Refinitiv. Total Disney plus subscriptions of 152.1 million surpassed the 147.76 million that analysts had expected, according to Refinitiv.
Parks, experiences, and products division reported a 72 percent increase in revenue to $7.4 billion in the fiscal third quarter, up $4.3 billion from a year ago. Disney said it had increases in attendance, cruise ship sailings, and occupied room nights. Its new Genie plus and Lightning Lane products helped boost average per capita ticker revenue in the quarter, the company added.
Disney said that it has been able to bring back in-park experiences such as character meet-and-greets, nighttime events at Disneyland, theatrical performances, etc., and this has enabled the company to increase capacity at its parks. The company’s Chief Financial Officer Christine McCarthy while speaking on the company’s earnings call said that “As it relates to demand, we have not yet seen demand abate at all and we still have many days when people cannot get reservations. So, we’re still seeing demand in excess of the reservations that we are making available for our guests.”
Per capita spending at domestic parks went up 10 percent in the quarter from a year ago and is more than 40% higher than fiscal 2019, the company said. Occupancy at domestic hotels in the third quarter was 90%. International visits to domestic parks continued to be slow, the company’s CFO said adding that “We expect international visitation when it’s fully back to actually be additive to margins, because those guests tend to stay longer at the parks and they spend more money when they’re there, as well.”
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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