Disney presented, last Wednesday (10), the balance of the 4th quarter of 2021 (Disney’s fiscal year starts in November and ends in October of the following year). Among the highlights is the increase in revenue, while on the other hand the growth of new Disney+ subscribers suffered a strong slowdown.
The result was below market expectations and the company’s shares fell 8% yesterday. The conglomerate’s revenue for the quarter ended October was $18.5 billion, an increase of 26% compared to the same period last year.
However, in terms of streaming, the entertainment giant managed “only” 2.1 million new subscribers, reaching the mark of 118.1 million subscribers worldwide. The number was considered disappointing because, in the previous quarter, the service had gained 10 million new subscriptions, for example.
Despite the frustrating result, CEO Bob Chapek tried to demonstrate satisfaction with the company’s commercial path. Disney+ has been one of the main focuses of the company, which has made large investments to bring exclusive content to the platform.
“As we celebrate Disney+’s 2-year anniversary, we are extremely pleased with the success of our streaming business, with 179 million total subscriptions (counting all streams) in our DTC (direct to consumer) portfolio at the end of the fiscal year 2021 and 60% year-over-year subscriber growth with Disney+,” Chapek said at the presentation.
The executive also defended that the long-term goals, for 2024, are going well. He also went on to say that the company plans to cut down on the time its films will run in theaters, all to bring them to streaming sooner.
Explanation of results
Analysts believe that there are several causes that explain the retraction in the results of Disney’s main streaming. One of the explanations is precisely the increasingly fierce competition in the sector, which is dominated by Netlifx, but which has other important players such as Amazon Prime Video, HBO Max and Paramount+.
Experts consulted by Deadline website point out that there is skepticism in the market that, after the extraordinary growth of Disney+ subscribers, the business can remain on top. They say it is difficult to calculate whether the multi-million investments that will have to be made will be able to support the balance on the positive side.
“We remain a little skeptical that more Star Wars/Marvel/animations/family content will be enough to increase Disney+’s audience and make it par with Netflix,” said Doug Creutz of market analyst Cowen.
To try to attract new subscribers, Disney+ launched a promotional action at the beginning of November that guarantees a month of service for just R$1.90. The promotion is also being carried out in other markets, such as the United States, where the subscription price for the first month is going out for US$ 2 (equivalent to R$ 10.90 at the current price).