Disney surprised many analysts this week when it announced a stronger than expected finish to the year. The company added 11.8M new subscribers to Disney+ in Q4, elevating its total number of subscribers to 129.8M. Analysts had been predicting a mere 7.3M new subscribers for the quarter. This overperformance combined with a doubling in year-over-year revenues from its theme parks and resorts business sparked a surge in Disney’s share price.
Q4 growth at Disney+ was driven by a strong interest in high-profile releases, including the HAWKEYE original series spun out of the Marvel Cinematic Universe, Peter Jackson’s Beatles documentary GET BACK, and Walt Disney Animation Studios’ ENCANTO. Another bright spot was a 15% increase in Disney+’s Average Revenue Per User (ARPU), which now stands at $6.68/month in the U.S. and Canada. The company also reported a significant growth in subscriptions for its other streaming services, ESPN+ and Hulu. The total subscriber count across all services globally is approaching 200M. Disney announced plans to increase its spending on streaming content to $33B for the current fiscal year, up from $25B last year.
Company CEO Bob Chapek appears to be leaning further into the company’s streaming-first strategy, stating that he does not “subscribe to the belief that theatrical is the only way to build a Disney franchise.” Lukewarm box office results for ENCANTO further re-enforces that belief and may have influenced Disney’s decision to move its upcoming Pixar release TURNING RED to Disney+ exclusively.
See also: Disney’s Earnings Show Rebound in Disney+, Parks Businesses (Wall Street Journal)