Disney+ hits 73 million subs, CEO talks restructure & streamer’s ‘key’ role

The Mandalorian

Disney has revealed that its direct-to-consumer and international revenues grew by more than 40% over the past quarter, with recently launched streamer Disney+ adding more than 13 million new subscribers.

The Mouse House’s DTC and international segment brought in $4.9bn during the three months to the start of October – its fourth quarter – with Disney+ growth taking its global subscriber base to 73.7 million.

That is up from the 60.5 million subscribers recorded by Disney in August, while operating losses from the DTC and international side of the business was also down to $580m, from $751m.

The results coincide with the one-year anniversary of Disney+’s launch in the US, but the Mouse House’s other streamers also reported substantial growth.

LR: Bob Iger & Bob Chapek

Hulu now has 36.6 million paying subscribers, up by 1.1 million from the previous quarter, while ESPN Plus has gone from 8.5 million to 10.3 million paying customers.

Streaming ‘bright spot’

Disney CEO Bob Chapek, who replaced Bob Iger earlier this year, said that The Mandalorian streamer had provided a “bright spot” for the company, which is continuing to haemorrhage money from its parks and cruises division.

“Even with the disruption caused by Covid-19, we’ve been able to effectively manage our businesses while also taking bold, deliberate steps to position our company for greater long-term growth,” he said.

Chapek added that Disney’s DTC business is “key to the future of our company” and added that the 73 million paid subscribers had “far surpassed our expectations in just its first year.”

The effect of the pandemic on Disney’s entire business remains huge, however. The company’s revenue fell by $4.5bn during its fourth quarter to $14.7bn, down from $19.1bn this time last year.

Peter Rice

Disney added that the impact of Covid-19 on its fourth quarter alone is estimated to stand at $3.1bn, with a $7.4bn hit across the entire year.

Distribution rejig

In an investors call following the results, Chapek also reflected on the restructuring revealed last month that has seen its media and entertainment businesses revamped, with a new distribution division and revamped content groups now focused on feeding its streaming operations.

Chapek said that the rejig had created “clarity and accountability, which everyone really likes” and added that the new-look operations meant teams could focus on their specific expertise.

“We have separated out roles to what people do best. Content does what they do best and same with distribution. Distribution will set the parameters for our annual long-term budget framework and that will be agreed with the content creators.”

The distribution arm, he added, is now able to “optimise the commercialisation [of programming] without too much unnecessary regard for legacy distribution platforms”, while creatives can focus on making “the best content and storytelling possible.”

Disney’s content groups for studios, general entertainment and sports are being led by existing execs. Alan Horn and Alan Bergman, who had helmed movies, become chairmen of Disney Studios; Peter Rice, who has overseen TV production since 2018, leads general entertainment; and ESPN chief James Pitaro heads up sports.

Earlier this week, Rice revealed the new structure of its general entertainment arm, describing it as “a big change to our legacy television structure,” which had been built around linear networks.

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