While COVID-19 has had a disastrous effect on Disney’s theme park business, the company’s streaming platform has far exceeded expectations after gaining over 73 million subscribers within a year.
Disney+ Shows No Signs of Slowing Down
Despite only launching in November 2019, and still only available in select territories, Disney+ has amassed 73.7 million paid subscribers.
This performance is greater than the company had predicted, having only planned to reach between 60 million and 90 million subscribers by 2024.
There are many reasons you can point to that explain Disney+’s rapid growth. Of course, it’s the main destination for access to all of Disney’s catalog, which includes its animated classics, franchises like Star Wars and Marvel, and shows like The Simpsons.
However, the impact that COVID-19 has had on the streaming industry cannot be understated. With many stuck indoors, online entertainment has seen a boom.
While some of Disney+’s content has been delayed due to the pandemic, it also allowed things like Hamilton and Black Is King to launch on the service instead of theaters.
Equally, schemes like paid Premier Access for Mulan have proven successful. While Disney CEO Bob Chapek didn’t give figures, during an investor call he hinted that the scheme had performed successfully and could be applied elsewhere in the future.
Disney+ Isn’t Making Money
Despite the huge success of Disney+, the company’s streaming division isn’t turning a profit. This includes the other services that Disney owns, like Hulu, ESPN, and Star.
In the last quarter, losses in the direct-to-consumer vertical came to $580 million. For the fiscal year, it was a $2.8 billion loss.
According to The New York Times, losses from streaming will peak in 2022 and normalize thereafter, with analysts predicting profitability by 2024.
By that point, the streaming industry could look very different, with existing top players like Netflix and Amazon Prime competing against an increasingly wider playing field from the likes of Peacock, Paramount+ and Apple TV+.
These losses are not unexpected. The costs of launching Disney+, rolling it out worldwide, and funding the content is not a cheap job.
Bob Chapek said that “it’s very clear to [Disney] that new content adds subscribers”, with more details expected during a virtual investor day on December 10.
Is Disney+ Worth the Money?
Priced at only $6.99 a month, Disney+ is one of the cheapest streaming services available. It’s even cheaper if you pay for a year.
While that price will undoubtedly change in the future, for now Disney are using it to draw customers in—and it’s clearly working.