WASHINGTON — The
Disney+ streaming service saw its subscriber
ranks jump by 12 million users compared to June, results showed on Tuesday, as
the home to “Obi-Wan Kenobi” and “Black Panther” continued to defy a souring
economy.
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The gain beat analyst expectations, but the
California-based group’s streaming services, which include Disney+, ESPN+, and
Hulu, more than doubled their year-to-year operating losses to $1.47 billion
for the July to September period, the results said.
The number of people subscribing to Disney+ reached
164.2 million people, more than the 161 million estimated by Factset, a data
company.
But this was offset by the high financial loss for
Disney’s flagship streaming service that is facing a wall of rivals, including
industry leader
Netflix and its 223 million subscribers worldwide.
Walt Disney Co. CEO Bob Chapek said that building
the streaming business had required “significant investment”, and that the
service was now suffering “peak operating losses, which we expect to decline
going forward”.
Disney+, fast on the heels of Netflix, is about to
launch a cheaper but ad-supported subscription offering to attract even more
viewers but also diversify its revenue stream. Disney’s version will launch on
December 8 for $7.99 a month, while its basic ad-free subscription jumps to
$10.99.
The company in August said that it hopes Disney+
will reach profitability in 2024 and is counting on upcoming releases such as
“Black Panther: Wakanda Forever” and “Avatar: The Way of Water” to fuel its
subscription totals.
Sales and profit for the entertainment group as a
whole were below analyst expectations, and shares in Disney fell as much as 7.9
percent in late trading after the results were posted.
In an earnings call, Chapek pointed to record
results at the parks, experiences, and products division, which includes the
company’s theme parks and cruise line business.
It saw revenue jump by more than 36 percent to $7.4
billion from a year before, riding a wave of tourism after restrictions due to
the pandemic were loosened.
The company said its merchandising licensing
business also did well, primarily due to higher sales of products based on
Mickey and Friends, Encanto, and Toy Story.
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