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ESPN+ hits 24.3m subs as Disney posts US$1.5bn in streaming losses for Q4

Disney CEO Bob Chapek says media giant in ‘strong position’ amid growing competition for sports media rights.

9 November 2022 Josh Sim

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  • Disney’s DTC operating losses nearly double to US$1.5bn
  • Media titan’s total yearly revenue increased by 23% to US$82.7bn
  • ESPN+ subscriber growth helps ease decreased income from UFC PPV events

Disney-owned sports streaming platform ESPN+ has increased its total paid subscribers by 42 per cent year-over-year (YoY) to 24.3 million.

Disney’s fourth fiscal quarter financial results show that the media giant’s overall direct-to-consumer (DTC) revenues for the three months ending 1st October increased by eight per cent YoY to US$4.9 billion.

On the other hand, its operating losses nearly doubled from US$800 million to US$1.5 billion. Disney noted that the increase came about due to an increased loss at Disney+ and a decrease in results at Hulu.

However, its losses were offset partially by improved results at ESPN+, largely attributed to its growth in subscribers, which have risen from 17.1 million a year ago. Revenue would have increased further had it not been for a decrease in income from Ultimate Fighting Championship (UFC) pay-per-view (PPV) events.

Speaking on an investors’ call, Disney chief executive Bob Chapek said the company was in a “strong position” to respond to increased competition for sports rights, adding that the company aims to “recognise that we don’t need everything, we just need the right things.” He added that multiplatform rights deals that provide flexibility between linear and over-the-top (OTT) programming remain a top priority.

Recently, Disney confirmed it was not planning to spin off ESPN, following speculation driven by a letter from Third Point Capital’s Daniel Loeb urging Chapek to do so.

The average monthly revenue per paid subscriber for ESPN+ grew by two per cent YoY to US$4.84. This was said to be driven by a lower mix of annual subscribers and an increase in retail pricing. In August, ESPN+ raised its monthly subscription fee by US$3 to US$9.99.

Disney also said that higher per-subscriber advertising revenue contributed to a lesser extent, which was partially offset by a greater mix of subscribers to multi-product offerings.

The media titan also reported a 39 per cent YoY increase in total Disney+ subscribers to 164.2 million, while Hulu recorded an eight per cent YoY increase to 47.2 million subscribers. All told, Disney now boasts more than 253 million subscribers across its various streaming platforms.

Disney’s total revenue for the year grew by 23 per cent YoY to US$82.7 billion, with its total operating income also up by 56 per cent to US$12.1 billion.

For the fiscal fourth quarter, its revenue rose by nine per cent YoY to US$20.2 billion, while its linear networks saw revenues decrease by five per cent YoY to US$6.3 billion.

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