The number of customers signing up for Disney’s new video streaming service has surpassed the company’s expectations as people rushed to take up the offer of viewing the likes of Star Wars, cartoons and other classic content that is traditionally available with the company.
Since it was launched last November, its streaming services have added about 28.6 million people, Walt Disney said.
This is the second foray into the lucrative sector of video streaming by Disney rivaling the likes of Netflix. The cost of the on-demand video service is at $6.99 per month.
The launch was described as “enormously successful” by Disney chief Bob Iger.
The total number of subscribers to the new service from Disney is now almost the same as that of its earlier on-demand streaming service Hulu – which was founded in 2007 and offers shows from US television.
“The launch of Disney+ has been enormously successful, exceeding even our greatest expectations,” Iger said on a conference call with analysts following the release of the company’s quarterly earnings of the company.
A warning about a hit to its operating income in the next quarter, expected to take a hit of about $300m because of the closure of its theme and entertainment parks in China because of the spread of the coronavirus, was also issued by Disney. The figure form Disney was based on the assumption that the virus outbreak in China will force the company to keep its entertainment parks and resorts in Shanghai and Hong Kong closed for at least two months in total. It also accounts for the significant drop in visitors to its park in Hong Kong because of the six month long pro democracy protests in the city.
The expanding tendency of viewers shifting away from traditional media to online to view films and television as well as music prompted Disney to announce starting of its own streaming service in 2017.
The company soon also announced acquisition of a major portion of Rupert Murdoch’s 21st Century Fox entertainment business in an effort to increase its product array.
“I’m enormously proud of what we have accomplished in a relatively short period of time and believe we are well positioned to not only withstand the disruptive forces … but to thrive,” Iger said.
He said that US accounted for most of the current subscribers and about half of them had used the website to sign up for the services. Disney’s “very accessible” price was partly responsible for the appeal of the services, he said.
He also added that the next priority of the company was to expand the services internationally.
Currently the company provides the services in five countries, including the US and Canada. Next month, Disney will launch the services in the UK as well as in other countries in western Europe. The services will also be launched in India in March, Iger said.
During the latest ended quarter the revenues of the company noted an uptick of 36 per cent year on year. But the profits dipped by 25 per cent to $2.1bn from $2.8bn to $2.1bn primarily because of increased expenses for the on-demand streaming services.
(Adapted from BBC.com)