Disney’s direct-to-consumer division lost $630 million in the quarter. The company pinned much of the blame on higher losses within Disney+, and to a lesser extent, ESPN+, which were partially offset by improved results with Hulu. Disney stock is trading down nearly eight percent on the news.
Disney earlier this week announced a limited-time promotion in which new and returning Disney+ subscribers could lock in a one-month membership for only $1.99. In hindsight, the offer – which is still valid to claim through the end of the coming weekend – was likely a preemptive measure to boost subs in the current quarter.
For the three-month period ending October 2, Disney added just 2.1 million Disney+ subscribers, pushing its total up slightly to 118.1 million. That’s still 60 percent more subscribers than it had at the same point a year ago, but Disney likely isn’t fond of the slowed growth.
CNBC notes that analysts with StreetAccount were expecting 9.4 million new subscribers during the quarter.
ESPN+, meanwhile, finished the quarter with 17.1 million subscribers and Hulu with 43.8 million, annual increases of 66 percent and 20 percent, respectively.
Specifically, Disney+ dealt with higher programming, production, marketing and technology costs. Higher Premier Access revenue from Jungle Cruise and Black Widow, however, helped stem losses.
The entertainment giant is no doubt hoping for a stronger holiday quarter. On a call with investors, Disney CFO Christine McCarthy said this quarter will be the first time in Disney+ history that they plan to release original content through the quarter from Disney, Marvel, Star Wars, Pixar and Nat Geo.