Disney has just revealed that the Disney+ streaming service and the products under its auspices have a number of consumers reaching 221 million, aka overtaking Netflix. Then they plan to increase the subscription fee.
Disney will increase its monthly subscription rates by 38% for the no-ads plan, to USD 10.99 in the United States in December, along with implementing a new subscription option, which is a paid subscription at the current rate but colored by ads.
The impact of this announcement was quite significant, namely Disney shares rose 6.9% to USD 120.15 at the close of the stock market on the same day after the announcement.
Disney itself just entered the video streaming service in 2017 to challenge Netflix, which first existed. One of their strategies to compete with Netflix is that subscription rates are much cheaper. Now, five years later, the number of Disney consumers has overtaken Netflix.
Keep in mind, the number of subscribers that reached 221.1 million at the end of June is a combination of Disney+, Hulu, and ESPN+ subscribers (the latter two are only available in a few countries, most notably the United States).
"Disney is gaining additional market share as Netflix struggles to increase the number of subscribers. Disney still has room to grow in the international market where they are also providing the service quickly and also increasing the number of consumers," said Haris Anwar, analyst at Investing.com.
Disney itself predicts that Disney+ will have between 215 million and 245 million subscribers by the end of September 2024. This prediction is lower than previous predictions, where they expected to have between 230 million and 260 million subscribers.
The adjustment was made after their plans in India were disrupted, due to failing to get broadcast rights for Indian Premier League cricket matches. Disney CFO Christine McCarthy estimates Disney+ Hotstar will add about 80 million by September 2024.
Although the number of subscribers continues to grow, they are still struggling to make a profit from this streaming business. In the last quarter, McCarthy admitted the streaming division lost $1.1 billion.