Disney reported rather underwhelming financial results for the fourth quarter (ended October 2) on Wednesday, falling short of analyst predictions across all of its services and revenue streams — reports CNBC.
The company only added 2.1 million new subscribers to its Disney+ streaming service in Q4, bringing its total subscriber count up to 118.1 million.
Wall Street analysts predicted 9.4 million new subscribers, up to a total of 125.4 million in total, despite Disney CEO Bob Chapek saying the streaming service had “hit some headwinds” and that the company only expected it to bring in “low single-digit millions” of new subscribers this quarter at the Goldman Sachs Communacopia Conference in September.
Disney+ broke 100 million paid subscribers in just 16 months, but it looks like the streaming service has run into a subscriber growth plateau since then. While the streaming service did beat Wall Street estimates last quarter, it posted less than ideal subscriber growth in Q1.
The media giant reported revenue of $18.53 billion USD for the quarter, falling just shy of the market’s $18.79 billion USD prediction. Diluted earnings per share were down to $0.37 USD — nowhere near the $0.51 USD estimates from Wall Street.
Disney stock went down 4% in after-hours trading following the company’s disappointing show of numbers.
The company’s other streaming platforms managed respectable growth in the fourth quarter. Revenue for Disney’s entire direct-to-consumer segment, which includes Disney+, ESPN+, and Hulu, grew 38% to $4.6 billion USD.
Since Disney+ was in its infancy at the start of the pandemic, the service was able to ride a huge wave of subscriptions from millions stuck at home. If Disney wants to realize its goal of reaching 230-260 million Disney+ subscribers by 2024, though, they’re going to need a lot more content.
“We remain focused on managing our DTC business for the long term, not quarter to quarter,” said Chapek during the earnings report.
Disney plans on considerably ramping up content for Disney+ in the fourth quarter of 2022, and expects to see a healthy boom in subscriber growth as a result.
“Q4 will be the first time in Disney+ history that we plan to release original content throughout the quarter from Disney, Marvel, Star Wars, Pixar, and Nat Geo, all in one quarter. This includes highly anticipated titles such as Ms. Marvel and Pinocchio,” Disney Chief Financial Officer Christine McCarthy said during the company’s earnings call.