Disney sees positive signs for business as streaming growth cools

Reuters

The Walt Disney Company on Thursday said it was seeing "encouraging signs of recovery" across a wide range of its businesses while its streaming television service grew slower than expected in the recently ended quarter.

TV streaming service Disney+ ended the quarter with nearly 104 million subscribers, fewer than expected but still part of a stable of "direct-to-consumer" services that saw audiences swell as people turned to the Internet for entertainment because of the pandemic.

Disney said that it was seeing positive signs across its operations including parks, cruises, and resorts which took the hardest hit from COVID-19.

"We're pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations," Disney Chief Executive Bob Chapek said in the earnings release.

"This is clearly reflected in the reopening of our theme parks and resorts, increased production at our studios, the continued success of our streaming services."

Disney held firm to its target of reaching 230 million to 260 million subscribers by the year 2024.

"Disney+ has been a major success for the company, however, growth is significantly decelerating as the initial pandemic boost has waned," said eMarketer analyst Eric Haggstrom.

Executives on the earnings call said show production is returning to full levels as it continues to invest in new content for its streaming services as well as theatrical releases.

The entertainment titan's franchises include Disney, Marvel, Pixar and Star Wars.

Disney also owns ESPN, Hulu, and Hotstar.

"Hulu remains one of the market leaders in streaming video advertising," Haggstrom said.

"Hulu has become one of the crown jewels in Disney's massive video ad business alongside ABC and ESPN."