That’s just 2.1 million more than the company reported in August as of the end of its fiscal third quarter, a dramatic but not-unexpected slowdown.
The company divulged the streaming numbers as part of its fiscal fourth-quarter earnings report. The results fell short of Wall Street analysts’ expectations.
Analysts polled by FactSet had expected 126 million Disney+ subscribers.
ESPN+ came in at 17.1 million subscribers, ahead of analysts’ forecast. Hulu is at 43.8 million, including both the on-demand service and live TV package. While that number was an uptick from last quarter, it was below Wall Street estimates.
CEO Bob Chapek had signaled in September that subscriber growth for Disney+ would slow. The company has made it more than halfway to its guidance of 230 million to 260 million global subscribers by the end of 2024. Chapek indicated in an appearance at a Wall Street conference that gains would be in the low-single-digit-millions, a decline from the more than 12 million added in the prior quarter.
Average revenue per customer on Disney+ also dropped from $4.62 to $4.16, with the company blaming a higher mix of Disney+ Hotstar subscribers in the current quarter compared to the prior-year quarter. Price hikes and a lower mix of wholesale subscribers helped offset the decline. Disney+ has attained scale in South Asia due to Hotstar, the established streaming service acquired from Fox in 2018. The catch is that despite all of that scale pricing is low and it is essentially an add-on for Hotstar subscribers.
Since launching in November 2019, two years ago this coming Friday, flagship Disney+ has been the most successful new challenger to Netflix. In its second year, it has grown 60%. Powered by originals drawn from the Marvel Star Wars stables as well as a number of Premier Access and free-for-subscribers movie releases, the service has established itself in streaming’s top echelon. One issue in Year 2 has been the pipeline, given delays and complexities due to Covid. The company is planning a spate of content announcements on Friday, which it has dubbed Disney+ Day.
Hulu presents in many ways the biggest challenge for Disney. While it is continuing to grow, there are questions about its future, especially as a global brand. When Disney took control of it in 2019, buying out NBCUniversal’s stake after having acquired 21st Century Fox’s as part of a massive M&A deal the year before, it halted the global expansion of the service. It has since repositioned FX programming in a dedicated channel on Hulu and made other moves. The financial option Comcast has on its stake makes life a bit complicated for Disney, as the more it boosts Hulu’s value, the more it will owe Comcast in its settlement of the stake sale.
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