The news: Disney added 12.1 million streaming subscribers in its latest quarter, up 39% year over year and blowing Netflix’s recent 2.4 million quarterly subscriber comeback out of the water.
But streaming growth isn’t enough on its own anymore—Disney stock fell more than 6% Tuesday and an additional 13% Wednesday after missing revenue expectations by $1 billion and doubling its streaming operating losses.
Streaming gains: Disney’s strong streaming subscription growth in a year in which other competitors (you know the one) have struggled to keep up shows its resilience in streaming, but those numbers aren’t driving revenue enough to satisfy investors.
Pumping up the ARPU: Since adding subscribers on its own isn’t enough to please investors, Disney is working to squeeze more value out of them. There are several new initiatives underway to increase the average revenue per user (ARPU) on Disney+.
Our take: Strong subscription growth on Disney+ just before a major price hike shows that consumers are still willing to dish out for content—as long as it's viewed as essential or “premium” programming.
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