SVOD slowdown hits Disney+ as subscriber growth misses projections

WandaVision

The SVOD frenzy of 2020 that recently hit Netflix now also appears to have impacted Disney+, after the Mouse House streamer missed analyst projections for new subscribers in the second quarter.

Disney+ still ended the second quarter of 2021 with 103.6 million subscribers, however, which was up by 33.5 million year-over-year. The total was significantly less than predictions of 109.3 million though.

The Mouse House first revealed that it had surpassed 100 million subscribers during its annual meeting in early March, with this latest tally taken from Disney’s second fiscal quarter that ended 3 April.

Bob Chapek

The news is the latest indication that the SVOD boom of 2020 has cooled, with Netflix shares falling almost 10% last month after it revealed stalled subscriber growth.

Despite its own slowdown, CEO Bob Chapek told analysts that “we’ve been pleased with the growth and engagement in those markets” where Disney+ – and its adult-oriented Star hub – have launched.

He added: “Our steady cadence of new high-quality branded content, along with our robust collection of library titles allows us to continually attract new subscribers and retain existing ones.”

Tapping the ‘cultural zeitgeist’

The CEO lauded the success of Star Wars series The Mandalorian, along with the Marvel Studios shows Wandavision and The Falcon And The Winter Soldier. Chapek said that “these not only became immediate hits, but part of the cultural zeitgeist.”

And even though the streamer has experienced slowdown compared to its meteoric rise during 2020, Chapek said that Disney+ is “on track” to achieve the guidance of 230-260 million subscribers by the end of 2024.

Disney will continue to lean on its Asian iteration of the streaming service, Disney+ Hotstar, which CFO Christine McCarthy said was the strongest contributor to net subscriber additions during the quarter. She said that Disney+ Hotstar made up “approximately a third of the total Disney+ subscriber base as of the end of the second quarter.”

Falcon And The Winter Soldier

The increasing number of Hotstar subscribers however has driven overall ARPU down due to the low-cost of the service in markets like India. The overall monthly revenue per subscriber has decreased from $5.63 to $3.99. Excluding Disney+ Hotstar, McCarthy said that ARPU was still down at $5.61.

Disney’s US-only streaming services Hulu and ESPN+ had 41.6 million and 13.8 million paid subscribers respectively at the end of the quarter – up 30% and 75% year-over-year.

Overall, in spite of Disney+’s arguable first blip since launch, the performance of the streamer to date, Chapek said, “makes us feel relatively bullish going forward.”