The Walt Disney Company released its financial report for fiscal Q2 2023, which ended on April 1, 2023. The company has performed well in revenue, net profit, free cash flow, and overall ARPU. Conversely, the global number of Disney+ subscribers in FY Q2 2023 declined.
Disney+ reports a loss of 4 million subscribers, bringing the worldwide count down to 157.8 million. It represents an almost 2% decline compared to the previous quarter when the paid subscriber count was 161.8 million.
However, over the past 12 months, the Disney+ platform has substantially increased its global subscriber base. Approximately 20.1 million new paid subscribers have joined the platform during this period. The 15% YoY growth in new paying subscribers demonstrates Disney+’s ongoing popularity and appeal of the popular OTT platform to audiences worldwide.
Disney+ subscribers by country
India is the largest market for the online video streaming giant. The country accounts for approximately 33.5% of Disney+ paying subscribers through the Disney+ Hotstar platform. And that’s why the significant decline in paid subscribers during fiscal Q2 2023 for the second consecutive quarter becomes more concerning for India’s largest OTT platform.
The number of Disney+ Hotstar subscribers declined a notable 8% QoQ in fiscal Q2 2023 to 52.9 million. Over the past three months, approximately 4.6 million paying users left Disney+ Hotstar, marking the largest-ever quarterly loss of paid subscribers for the platform. This loss even surpassed the previous quarter’s decline of 3.8 million subscribers, further highlighting the challenges being faced by Disney+ Hotstar in retaining its subscriber base.
Despite the recent consecutive quarterly decline, Disney+ Hotstar managed to add nearly 2.8 million or 5.6% new subscribers in the last 12 months.
The decline in Disney+ Hotstar paid subscribers can be largely attributed to the loss of streaming rights for the Indian Premier Cricket (IPL) League, a major sporting event that attracts massive viewers from India.
The US and Canada region is the second largest market for Disney+, accounting for 29.3% of the total paid subscribers worldwide. In fiscal Q2 2023, the number of Disney+ paid subscribers from the US and Canada reached 46.3 million. It also represents a year-on-year growth of 4%, indicating a positive trend in the North American region.
Besides the domestic market, the international market (excluding India) also remains a significant contributor to the overall success and subscriber growth of Disney+. The number of Disney+ paid subscribers from International markets increased 36% YoY and 2% QoQ, to reach 58.6 million in fiscal Q2 2023. This depicts the platform’s strong appeal and growing popularity among audiences outside North America.
Disney+ ARPU by country
Despite the fall in paid subscribers, there was a notable increase in the average monthly revenue per paid subscriber for Disney+ in FY Q2 2023. It is a testament to the rising popularity among the existing subscriber base. Additionally, with the introduction of cheaper ad-based services, subscriber numbers are expected to pick up again in the future.
In FY Q2 2023, the Disney+ OTT platform generated an average revenue of $4.44 per paid subscriber worldwide, registering a significant 13% QoQ and a 2% YoY increase. The growth in Disney+ ARPU indicates the streaming giant’s ability to generate higher revenue from its subscriber base during that period.
The North America region, specifically the US and Canada, plays a significant role in generating monthly ARPU for Disney+ platform. In FY Q2 2023, the average monthly revenue per paid subscriber of Disney+ in the US and Canada increased impressively by 20% QoQ and 13% YoY to $7.14. This growth can be attributed to an increase in average retail pricing, indicating that subscribers in the North America region are willing to pay more for Disney+ content.
On the international front, the average monthly revenue per paid Disney+ subscriber (excluding Disney+ Hotstar) showed mixed results in fiscal Q2 2023. There was a 6% QoQ increase in the monthly ARPU of the Disney+ International platform, rising from $5.62 to $5.93. However, the company generated $6.35 in monthly ARPU from each of its Disney+ International subscribers during a year-ago period, indicating a nearly 7% YoY decline in FY Q2 2023.
Despite being the largest market in terms of paid subscribers, India’s contribution to Disney+ revenue is surprisingly low. India is a well-known price-sensitive market. Hence, the relatively lower pricing of subscription plans in India compared to other countries, as well as lower per-subscriber advertising revenue, play a major role in India’s contribution to Disney+ global revenue. As a result, the average monthly revenue per paid subscriber of Disney+ Hotstar – the platform’s offering in India – dropped substantially during the second quarter of fiscal 2023. Disney+ Hotstar’s average monthly revenue per paid subscriber has declined 22% YoY, from $0.76 to $0.59 in the last 12 months.
Overall, The Walt Disney Company generated $21.8 billion in revenue, showing an impressive 13% YoY growth globally.
In a nutshell
The Walt Disney Company, one of the biggest media companies in the world, is facing stiff competition from newer players like Netflix, which has been in the streaming content market for less than a decade. The number of Netflix paid subscribers reached an all-time high of 232.5 million in fiscal Q1 2023, which ended March 31, 2023, registering nearly 5% YoY growth. The platform added over 10 million global paid subscribers during the quarter.
