LOS ANGELES—Disney reported large subscriber gains for its direct-to-consumer offerings in the company’s Q4 earnings for fiscal year 2022 ending Oct. 1 as its top executives told investors that it had lined up more than 100 advertisers for the launch of the Disney+ offering with ads in December and that operating losses for its streaming services have peaked.
The company is still expecting the direct-to-consumer services to become profitable in fiscal 2024.
Overall, global subs for Disney+ increased by 39% year over year to 164.2 million in Q4, while ESPN+ grew 42% to 24.3 million and Hulu recorded a more modest 8% growth to 47.2 million.
Hulu’s sub counts included its Live TV + SVOD virtual MVPD offering that increased 10% to 4.4 million subs from a year earlier.
Total global subs hit 235 million.
Direct-to-Consumer revenues for the quarter increased 8% to $4.9 billion and operating loss increased $0.8 billion to $1.5 billion, the company reported. The increase in operating loss was due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+.
However in the earnings call with investors Disney CEO Bob Chapek said losses from its streaming services had peaked based on several factors and that the company still expects them to become profitable in fiscal 2024.
"First, the benefit of both price increases and the launch of the Disney+ ad tier next month,” will help reduce losses, he said. “Second, a realignment of our costs, including meaningful rationalization of our marketing spend. And third, leveraging our learnings and experience in direct-to-consumer to optimize our content and distribution approach to deliver a steady state of high-impact releases that efficiently drive engagement and subscriber acquisition."
Chapec also said that “Disney+ has secured more than 100 advertisers for our domestic launch window, spanning a wide range of categories and our company has over 8,000 existing relationships with advertisers who will have the opportunity to advertise on Disney+.”
