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Walt Disney Co. said on Thursday that its Disney +-branded streaming service grew to nearly 95 million subscribers in its first quarter of its fiscal year, as the pandemic continued to strain the entertainment giant’s finances.
The Disney + subscriber count of 94.9 million is up from the company’s 86.8 million reported in December. While a significant portion of Disney + subscribers go through Disney’s bundle with its Hotstar service in India, the growth is a positive sign for a service seen as critical to its future.
Disney reported much worse revenues than a year ago, but not as bad as Wall Street expected.
Net income fell 99% to $ 29 million in the three months ended Jan. 2. During the same period of the previous year, Disney made a profit of $ 2.13 billion. The company’s profit of 32 cents a share, excluding certain items, was much better than the 34-cent loss expected by Wall Street analysts, according to data firm FactSet. Quarterly revenue fell 22% to $ 16.2 billion, but it also exceeded analysts’ expectations of $ 15.9 billion.
Disney’s report comes just two months after the company announced a significant increase in programming for its streaming services, with the goal of bringing at least 100 titles to Disney + per year. He teased content, including a series on Star Wars character Lando Calrissian, a live-action movie “Pinocchio”, a “Moana” series and a “Guardians of the Galaxy” holiday special.
Virtually every recent Disney movement has focused on streaming.
This month, Disney said “Blank Panther” director Ryan Coogler will develop a series for Disney + set in Wakanda Country, as part of an exclusive deal to produce television content for the company. . During Super Bowl Sunday, Disney announced the upcoming release of the animated fantasy “Raya and the Last Dragon” at Disney + through its “First Access” model, which charges an additional $ 30 fee to watch the movie.
Disney is counting on Disney + and its other streamers to make the Mouse House a global entertainment superpower for years to come. In December, the company set a goal of reaching up to 260 million Disney subscribers by the end of fiscal 2024. The company’s total subscriber base for all of its services – including Hulu, ESPN +, and Star – are expected to hit $ 300-350 million right now.
The growth of streaming at Disney has been a boon to shareholders, sending stock to record highs as the pandemic shakes other parts of the business. Disneyland in Anaheim has been closed since March due to the spread of COVID-19, and attendance at Walt Disney World has suffered from capacity restrictions. Major releases from the film studio, including “Black Widow,” have been repeatedly delayed. “Black Widow” is currently slated for a theatrical release in May.
As a result, Disney has laid off thousands of workers across the company, reduced executive bonuses, and reduced assets. This week, Disney announced that it would close the animation house Blue Sky Studios, known for the “Ice Age” films, cutting 450 employees. The removal of the old Fox brand came after the decision to eliminate Radio Disney in December.
The quarterly report also follows a major restructuring that Chapek enacted in October to center the entertainment giant’s media and entertainment business around the company’s high-priority streaming efforts.
Disney parks, experiences and products – which include cruise lines, resorts, and merchandise – continued to erode profits. The industry recorded a loss of $ 119 million compared to operating profit of $ 2.52 billion a year ago. Revenue fell 53% to $ 3.59 billion.
The new segment of media and entertainment distribution, which includes studios, television networks and streaming services, generated $ 1.45 billion in operating profit, down 2% from to the previous year. The division’s total sales fell 5% to $ 12.7 billion.
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