The COVID-19 pandemic might have been problematic for several businesses around the world, however, there are some for whom it came as a blessing in disguise. The Walt Disney Company’s streaming service, Disney+, which was launched last year seems to be one of those. In its fourth-quarter report for the fiscal year 2020 which ended on October 3, Disney reported a massive increase in paid subscriber user base for its streaming service Disney+, which now has 73.7 million users .
It might not be surprising to see such numbers for Disney+ as almost all the streaming services benefitted from the pandemic’s stay-at-home norms. In its Q3 report, Disney’s streaming service had reported 57.5 million paid subscribers. The average monthly revenue per paid subscriber came down for Disney+ from $4.62 in Q3 to $4.52 in Q4.
A major contributor to the growth of Disney+ in FY 2020 was the inclusion of Indian streaming service Hotstar in April this year. Driven by the demand created by the recent cricket mega event, IPL and digital release of major Bollywood movies, Disney+Hotstar contributed the most to Disney+’s overall subscription base. According to CFO Christine McCarthy, Diney+Hotstar recorded almost a quarter of Disney+’s overall subscriber base, which must be around 18.5 million subscribers. Most of these subscribers come from the Indian region, while the service has recently entered the Indonesia and Singapore market.
The Walt Disney Company’s other streaming services also recorded a significant increase in paid subscriptions over a period of one year. Sports streaming service, ESPN+, has recorded the highest escalation in subscribers out of all of the company’s services. With more than a 100% increase year-over-year, ESPN+ has reported 10.3 million paid subscribers in Q4 2020. But average monthly revenue per paid subscriber for the sports service went down by 12% year-over-year for the sports streaming service to $4.54.
“Higher results at ESPN+ were driven by subscriber growth and higher income from Ultimate Fighting Championship pay-per-view events,” said Disney.
On the other hand, Hulu’s subscription base growth was driven by its video-on-demand segment. Its overall subscriber base stands at 36.6 million after Q4 2020, a 28 % increase year-over-year. Hulu’s overall average monthly revenue per paid subscriber rose by 22% to $71.90.
The Walt Disney Company stated, “The improvement at Hulu was due to subscriber growth and increased advertising revenues driven by higher impressions, partially offset by an increase in programming and production costs due to higher subscriber-based fees for programming the live television service.”
Overall, The Walt Disney Company’s direct-to-consumer & international business, which includes all the streaming services, reported a surge in revenues by 41% in Q4 to $4.9 billion. For the whole FY 2020, this particular business segment of Disney recorded revenues of $17 billion, an increase of 81% from last year. Segment operating loss also went down for Disney’s direct-to-consumer & international business by 28% from $751 million to $580 million.
“The decrease in operating loss was primarily due to improved results at Hulu and ESPN+, partially offset by higher costs at Disney+, driven by the ongoing rollout and a decrease at our international channels,” The Walt Disney Company stated.
Bob Chapek, CEO of Disney, said in a statement, “The real bright spot has been our direct-to-consumer business, which is key to the future of our company, and on this anniversary of the launch of Disney+ we’re pleased to report that, as of the end of the fourth quarter, the service had more than 73 million paid subscribers – far surpassing our expectations in just its first year.”