Disney’s flagship streaming service, Disney +, is growing faster than anyone predicted – including Disney. But this growth does not tell the whole story.
Disney + now has 95 million global subscribers, the company revealed today in its first fiscal quarter earnings report (pdf). That is more than 74 million in October and only 27 million this time a year ago. Disney didn’t think it would reach that number for a few more years, so it’s giving itself a much bigger goal. Now it expects Disney + to have about 250 million subscribers by 2024. Since launching in the U.S. in November 2019, the service is available in more than 40 countries.
And that’s where the problem comes in. In two key markets – India and Indonesia – a Disney + subscription is significantly cheaper than in the United States and other countries. Disney’s streaming subscribers are skyrocketing, but the average amount of money the company earns from these users is doing the opposite.
Disney + average revenue per user (ARPU) fell to just over $ 4 this quarter, from $ 5.56 last year. In April, Disney + was launched in India as a new brand of Disney’s existing Hotstar service in the country. Then, in September, Disney launched Disney + Hotstar in Indonesia. Both launches helped Disney to accumulate more global subscribers – but they also lowered the platform’s ARPU.
The Disney + Hotstar “VIP” level in India costs 399 rupees a year – the equivalent of about 45 US cents a month. Disney + in the US costs more than 15 times that.
Netflix, by comparison, has an ARPU of around $ 11. Disney’s other streaming services – ESPN + and Hulu, which are not available in India or Indonesia – have not seen similar drops in ARPU. In fact, they have increased since last year.
Therefore, while the impressive Disney + subscriber statistics are significant, its ARPU shows the weakness of considering them the only measure to assess the service’s position in the market. Still, it is difficult to argue that Disney + was anything other than a huge success for Mouse House. The launch was so strong that Disney is already raising subscription prices in the U.S.