Disney+ has signed up 28.6m paid subscribers in the 10 weeks since its launch in the US, Canada, the Netherlands, Australia and New Zealand, a powerful start for the streaming service that has “exceeded even our greatest expectations” said Disney chairman and CEO Bob Iger.
Speaking on a call with analysts about Disney’s financial results for the first quarter of its fiscal 2020, Iger also revealed additional international debuts for the service. Disney+ will debut in India, through Hotstar (the existing OTT service Disney inherited from Fox) on March 29 and in Belgium, the Nordic countries and Portugal in the summer. The service is already set to arrive in the UK, Ireland, France, Germany, Italy, Spain, Austria and Switzerland on March 24.
The subscriber figure puts Disney+ well ahead of schedule to reach the 60m-90m worldwide subscriber total by the end of fiscal 2024 that Disney predicted before the launch. But Iger said it was too early to adjust that prediction and sounded a note of caution about the service’s prospects in international markets.
“The interest in streaming in general in those markets isn’t as high as it has been in the US,” he said, “so we have probably more of a marketing effort and more of a challenge to launch in those markets.”
Iger added that Disney is “currently in talks with several distribution partners” for Disney+ in the international markets. The company recently signed a distribution deal for France with Canal Plus and it is reportedly close to a similar agreement with Sky for the UK.
Asked about international expansion plans for Hulu, the streaming service Disney now controls and, in the US, bundles with Disney+ and ESPN+ for streaming customers, Iger reiterated that “we are working up a plan. But we’ve decided that the priority needs to be Disney+,” he added, predicting that Hulu’s international rollout will probably not begin until 2021.
Overall, in what Iger described as a “strong” first quarter of 2020 (the three months ending December 28 last year) Disney reported diluted earnings per share from continuing operations down 37% to $1.17 from $1.86 in the first quarter of the previous year. Revenues were up from $15.3bn to $20.86bn and net income was down from $2.79bn to $2.15bn.
The subscription figure for Disney+ at the end of the quarter was 26.5m.
Disney’s direct-to-consumer and international segment, which includes Disney+, showed revenues up from $0.9bn to $4bn and operating loss – attributed to costs associated with the launch of the streaming service and other factors - up from $136m to $693m.
The company’s studio entertainment revenues for the quarter were up from $1.8bn to $3.8bn and operating income increased from $309m to $948m, thanks in part to the box office performance of Disney hits including Frozen II and Star Wars: The Rise Of Skywalker.
The performance of the Disney films was partially offset, the company said, by a loss from the consolidation of the assets of 21st Century Fox and by a loss from theatrical distribution of Fox titles including Spies In Disguise, Ford v Ferrari and Terminator: Dark Fate. Disney said the Fox studio business caused a $50m loss in the quarter.
Disney was also hit by the effects on its theme parks in Shanghai and Hong Kong of the coronavirus outbreak. The company predicted that the closure of the parks could have a combined adverse impact on second quarter 2020 operating income of $260m.