Disney reported results for the final quarter of its 2022 fiscal year today, revealing a total of 164.2 million Disney+ global subscribers, an increase of 12 million subs from 152.1 million in Q3. The flagship streaming service was only expected to gain 9.35 million subs.
Across Disney’s streaming services, Disney+, Hulu and ESPN+ had a combined total of 235.7 million subscribers, up from 221 million in the third quarter. The company beat expectations of 233.8 million.
“2022 was a strong year for Disney, with some of our best storytelling yet… and outstanding subscriber growth at our direct-to-consumer services, which added nearly 57 million subscriptions this year for a total of more than 235 million,” said Bob Chapek, chief executive officer, The Walt Disney Company, in the letter to shareholders.
The company overtook rival Netflix for a second time, despite Netflix reaching 223.09 million global subscribers during its third quarter.
Disney previously decreased its 2024 guidance for the global Disney+ subscriber total last quarter to between 215 million and 245 million. The prior target was between 230 million to 260 million.
ESPN+ reported 24.3 million subscribers, a slight increase from 22.8 million. Hulu only gained 1 million subscribers, bringing the new total from 46.2 million to 47.2 million.
However, the company fell short of expectations for total revenue, which was reported to be $20.15 billion. Wall Street estimated that Disney would report a 15% year-on-year jump in revenue to $21.3 billion. The direct-to-consumer division lost $1.5 billion.
“We expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” Chapek added.
As the company looks for more ways to earn revenue, Disney increased subscription prices for Disney+, Hulu, Hulu Live TV bundles and ESPN+ plans. Disney+ is also set to launch a cheaper ad-supported version on December 8, over a month after Netflix launched its ad-free plan.
Earlier this month, Disney+ announced it’s testing an exclusive merch shop for subscribers, which could be another revenue stream for the company. The test allows select Disney+ subscribers in the U.S. to buy exclusive merchandise and gain early access to products from brands like Star Wars, Marvel, Disney Animation Studios and Pixar.
Meanwhile, the company is exploring ways to engage Disney+ subscribers and reach new audiences. For instance, Disney+ recently became the exclusive international home for new episodes of “Doctor Who” in more than 150 markets, including the U.S. There are now 46.4 million domestic subscribers, according to today’s earnings release.
The streamer also experimented with augmented reality in September, launching its first AR app that connects directly to content on the Disney+ platform. “Remembering” stars “Captain Marvel” Brie Larson and features a companion AR app that iOS users can download to watch an extension of the short film on the small screen. We guess that the company will roll out more AR-enabled features in the future to set itself apart from competitors.