Disney Profit Slips but Streaming TV Subscribers Jump
Disney on Wednesday said its profit slipped in the recently ended quarter but its television streaming service and parks were booming.
The entertainment giant reported net income of $470 million, just over half of the $912 million profit it made in the same period a year earlier.
But park attendance that had fallen due to the pandemic rebounded and the Disney+ television streaming service gained 7.9 million subscribers to 137.7 million.
When adding in subscriptions to Disney's streaming services Hulu and ESPN, the overall number tops 205 million.
"Our strong results in the second quarter, including fantastic performance at our domestic parks and continued growth of our streaming services once again proved that we are in a league of our own," said Walt Disney Company chief executive Bob Chapek.
He told analysts Disney is open to raising its streaming service subscription price in the future, but has no specific plans. Disney+ is pursuing a version of the service that would be supported by advertising, Chapek said.
Disney+ gained more subscribers than analysts had expected, in stark contrast to a dive in subscriber numbers reported by rival Netflix in the first quarter of this year.
A drop of just 200,000 users -- less than 0.1 percent of the total Netflix customer base -- caused shares in the Silicon Valley firm to plunge and prompted a shareholder to file a lawsuit accusing the streaming television titan of not making it clear that subscriber numbers were in peril.
"Disney+ has been taking Netflix out at the knees," tech analyst Rob Enderle of Enderle Group told AFP.
"Kids have always chased their content, and for parents it has been a no-brainer to get their service."
About half of Disney+ subscribers are families with children, executives said on the earnings call.
Disney stopped licensing its coveted content to Netflix to make it exclusive to its own streaming service, and said it planned to stick with the tactic when it comes to rivals in the market.