Disney+ has reached a 94.9 million subscriber base as of Q1 FY21 end globally with Disney+ Hotstar accounting for a 30% subscriber base, the company announced in its first-quarter results of FY21.
“Disney+ has exceeded even our highest expectations in just over a year since its launch, with 94.9 million subscribers as of the end of the first fiscal quarter, said Bob Chapek, CEO, the Walt Disney Company in an earnings call today.
Christine M. McCarthy, Senior Executive Vice President and CFO of The Walt Disney Company, shared that the Disney Plus Hotstar accounts for 30% of the total subscriber base. However, the average monthly revenue per paid subscriber for Disney+ decreased from $5.56 to $4.03 due to the launch of Disney+ Hotstar.
Speaking about the importance of cricket for Disney+ Hotstar and the risk of churn when the IPL season comes to an end, McCarthy explained, “Cricket is a very important part of a diversified programming strategy at Disney Plus Hotstar. But it also has a lot of other local content that consumers like to view.”
She further added, “We did see a bump up when IPL season started. But we have also made it economical for consumers to sign up for a one-year subscription versus going monthly. Those are some of the things that we’re looking at and utilizing to mitigate the churn that one could expect from IPL. But it’s a more diversified offering in terms of programming than just cricket.”
The Walt Disney Company is also set to launch Star, an upcoming hub within the Disney+ streaming service, across Europe, Canada, Australia, New Zealand, and Singapore on February 23, 2021.
Chapek mentioned, “We will be launching our new international general entertainment offering Star, which will offer 1000s of hours of movies and television from the company’s multiple studios, including content from our acquisition of 21st Century Fox, along with Star branded exclusive originals and mobile programming tailored to specific markets.”
Star will be integrated into Disney Plus as a distinct six brand tile and will offer easy to use parental controls to manage access to the content available on Star. “In less than two weeks away from launch, and we’re seeing tremendous excitement amongst consumers. During our investor day presentation, we’ve got an amazing robust pipeline of original content in development and production. For our full portfolio of streaming services, we have some of the best creative teams in the business. And that’s reflected in the tremendous appeal of our unparalleled programming,” shared Chapek.
The company today reported earnings for its first fiscal quarter ended January 2, 2021. Diluted earnings per share (EPS) from continuing operations for the quarter decreased 98% to $0.02 from $1.17 in the prior-year quarter. Diluted EPS for the quarter decreased 79% to $0.32 from $1.53 in the prior-year quarter.
Results in the quarter ended January 2, 202,1 were adversely impacted by the novel coronavirus (COVID-19). The most significant impact was at the Disney Parks, Experiences, and Products segment where since late in the second quarter of fiscal 2020, our parks and resorts have been closed or operating at significantly reduced capacity, and our cruise ship sailings have been suspended.
“We believe the strategic actions we’re taking to transform our company will fuel our growth and enhance shareholder value, as demonstrated by the incredible strides we’ve made in our DTC business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter,” said Chapek. “We’re confident that, with our robust pipeline of exceptional, high-quality content and the upcoming launch of our new Starbranded international general entertainment offering, we are well-positioned to achieve even greater success going forward.”
International Channels revenues for the quarter increased 5% to $1.6 billion and operating income decreased 3% to $375 million. The decrease in operating income was due to higher programming and production costs and lower affiliate revenue, partially offset by advertising revenue growth and a reduction in non-programming costs. Higher programming and production costs and advertising revenue reflected a shift in the timing of Indian Premier League (IPL) cricket matches from the third quarter of fiscal 2020 to the first quarter of fiscal 2021 as a result of COVID-19. IPL cricket matches generally occur during our third fiscal quarter. The decrease in affiliate revenue was primarily due to channel closures.
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