116 million paid subscribers for Disney+ on July 3

BURBANK, Calif. — The Walt Disney Company (NYSE: DIS) today reported earnings for its third fiscal quarter ended July 3, 2021.

“We continue to introduce exciting new experiences at our parks and resorts worldwide, along with new guest-centric services, and our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platforms,” said Bob Chapek, Chief Executive Officer, The Walt Disney Company.

Direct-to-Consumer

Direct-to-Consumer revenues for the quarter increased 57% to $4.3 billion and operating loss decreased from $0.6 billion to $0.3 billion. The decrease in operating loss was due to improved results at Hulu, partially offset by a higher loss at Disney+.

The increase at Hulu was due to subscription revenue growth and higher advertising revenue, partially offset by an increase in programming and production costs. Subscription revenue growth was due to an increase in subscribers and, to a lesser extent, higher rates driven by an increase in retail pricing for the Hulu Live TV+ SVOD service in December 2020. Higher advertising revenue was primarily due to increased impressions. The increase in programming and production costs was due to higher subscriber-based fees for programming the Live television service driven by an increase in the number of subscribers and rate increases.

The higher loss at Disney+ was due to higher programming and production, marketing and technology costs, partially offset by an increase in subscription revenue and Premier Access revenue for Cruella in the current quarter. Higher subscription revenue reflected subscriber growth and increases in retail pricing. The increases in costs and subscribers reflected ongoing expansion of Disney+ including launches in additional markets.

The following table presents the number of paid subscribers[1] (in millions)
for Disney+, ESPN+ and Hulu as of:

                July 3, 2021  June 27, 2020  Change
                ------------  -------------  ------
Disney+[2]             116.0           57.5   >100%
ESPN+                   14.9            8.5     75%
Hulu
 SVOD Only              39.1           32.1     22%
 Live TV + SVOD          3.7            3.4      9%
  Total Hulu            42.8           35.5     21%

The following table presents the average monthly revenue per paid subscriber[3]
for the quarter ended:

                July 3, 2021  June 27, 2020  Change
                ------------  -------------  ------
Disney+[2]             $4.16          $4.62   (10)%
ESPN+                  $4.47          $4.18      7%
Hulu
 SVOD Only            $13.15         $11.39     15%
  Live TV + SVOD      $84.09         $68.11     23%

The average monthly revenue per paid subscriber for Disney+ decreased from $4.62 to $4.16 due to a higher mix of Disney+ Hotstar subscribers in the current quarter compared to the prior-year quarter, partially offset by a lower mix of wholesale subscribers and increases in retail pricing.

The average monthly revenue per paid subscriber for ESPN+ increased from $4.18 to $4.47 due to an increase in retail pricing and higher per-subscriber advertising revenue, partially offset by a higher mix of subscribers to the bundled offering.

The average monthly revenue per paid subscriber for the Hulu SVOD Only service increased from $11.39 to $13.15 due to higher per-subscriber advertising revenue and a lower mix of wholesale subscribers, partially offset by a higher mix of subscribers to the bundled offering. The average monthly revenue per paid subscriber for the Hulu Live TV + SVOD service increased from $68.11 to $84.09 due to increases in retail pricing, per-subscriber advertising revenue and per-subscriber premium and feature add-on revenue, partially offset by a higher mix of subscribers to the bundled offering.

1. A subscriber for which we recognized subscription revenue. A subscriber ceases to be a paid subscriber as of their effective cancellation date or as a result of a failed payment method. A subscription bundle is considered a paid subscriber for each service included in the bundle. Subscribers include those who receive the service through wholesale arrangements in which we receive a fee for the distribution of Disney+ to each subscriber to an existing content distribution tier. When we aggregate the total number of paid subscribers across our direct-to-consumer services, whether acquired individually, through a wholesale arrangement or via the bundle, we refer to them as paid subscriptions.
2. Includes Disney+ Hotstar. Disney+ Hotstar launched on April 3, 2020 in India (as a conversion of the preexisting Hotstar service), on September 5, 2020 in Indonesia, on June 1, 2021 in Malaysia, and on June 30, 2021 in Thailand. Disney+ Hotstar average monthly revenue per paid subscriber is significantly lower than the average monthly revenue per paid subscriber for Disney+ in other markets.
3. Revenue per paid subscriber is calculated based on the average of the monthly average paid subscribers for each month in the period. The monthly average paid subscribers is calculated as the sum of the beginning of the month and end of the month paid subscriber count, divided by two. Disney+ average monthly revenue per paid subscriber is calculated using a daily average of paid subscribers for the period. Revenue includes subscription fees, advertising (excluding revenue earned from selling advertising spots to other Company businesses) and premium and feature add-on revenue but excludes Premier Access and Pay-Per-View revenue. The average revenue per subscriber is net of discounts offered on bundled services. The bundled discount is allocated to each service based on the relative retail price of each service on a standalone basis. In general, wholesale arrangements have a lower average monthly revenue per paid subscriber than subscribers that we acquire directly or through third party platforms like Apple.