People have flocked in the millions to online platforms after the pandemic prevented them to go to cinema halls and watch their favorite movies. This has been to the benefit of companies like Disney, whose streaming service has grown like crazy has grown like crazy in the past few months. The fourth quarter of the year however, saw the streaming service from the world’s largest entertainment company, take a hit. Disney+ posted a significant slowdown in the growth of subscribers, thus missing Wall Street’s estimates.
Disney’s streaming service added just 2.1 million subscribers in Q4 2021, its slowest growth to date, ending two years of strong growth, and taking the number of subscribers to a total of 118.1 million. Wall Street had estimated that 9.4 million new subscribers would be added in the fourth quarter, taking the total number of subscribers to 125.4 million.
This is in line with what Disney CEO Bob Chapek had said in September – the segment’s growth had “hit some headwinds” and that Disney expected to add “low single-digit millions” of streaming subscribers in the fourth quarter.
Chapek said during the company’s earnings call that the company had a goal to reach 230 million to 260 million Disney+ subscribers by 2024. “We continue to manage our [direct-to-consumer] business for the long-term, and are confident that our high-quality entertainment and expansion into additional markets worldwide will enable us to further grow our streaming platforms globally,” he added as he announced the fiscal Q4 results.
The overall subscriptions across Disney+, ESPN+, and Hulu came at 179 million subscriptions at the end of the fourth quarter, while the revenue for the direct-to-consumer (D2C) segments increased by 38% to come at $4.6 billion. Extra expenditure on production, marketing, and “technology costs” cost Disney’s D2C segments lost $630 million.
“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 on the company’s earnings call, adding that Disney expected better returns and additions to Disney+ subscribers in the second half of fiscal 2022 to be meaningfully higher than the first half of the year.