Half a decade since launching Disney+, The Walt Disney Company concludes the final earnings cycle of a turbulent 2024 for the entertainment industry.

Disney’s stock is roughly 50% off its record high from March 2021, but has shown momentum over the past three months. After five years of massive direct to consumer losses, the Mouse House now expects steadily growing profits in its DTC segment for the foreseeable future. Whether this is enough to cancel out lackluster parks performance and a declining linear TV business remains to be seen.

One key to success in the next five years of the entertainment business will be global streaming growth and monetisation. Parrot Analytics’ Streaming Economics model can break down subscribers by region for the three biggest global streamers, showing where Disney+ stacks up against primary competitors Netflix and Amazon Prime Video around the world.

Regional Subscriber Breakdown

Leveraging Star Wars and Marvel IP led to massive subscriber growth for Disney+ at the turn of the decade, but the shine of these series has decidedly worn off. Disney+’s Star Wars shows have seen diminishing returns in audience demand, and the platform’s global demand share of streaming original series has declined year over year for six consecutive quarters.

Future leaders in the attention economy must build global scale and loyalty. Disney+ (including Hotstar) trails Netflix and Amazon in all three international regions in global subscribers. Disney has not invested in local language content to the extent that Netflix and Amazon have over the years, and that lack of focus is seen in these regional subscriber numbers.

No one is concerned about Disney+’s longterm viability as a standalone service, but Disney won’t be happy to place third or fourth among the streamers that survive long term.

Disney+ Hub and Bundles

The role of Disney+ has evolved since its November 2019 launch, from emphasizing more male-oriented content into hosting a wider collection of the parent company’s exceptional IP collection. Amidst all the industry chaos of the 2020s, Disney has always remained the market leader in corporate demand share — a proxy for both long-term streaming success, and short-term licensing revenue potential.

Rolling Hulu into Disney+ has helped turn the platform into a true four quadrant service. If Disney+ provides the blockbusters, Hulu has the awards darlings, with recent major Emmy wins for FX’s Shogun and The Bear. Hulu series typically draw an older and more female audience, while Disney+ originals cater towards younger male audiences. Combining these catalogs — and their respective audiences — makes Disney+ more appealing to both consumers and advertisers.

This will be the first reported quarter since the Max-Disney bundle launched. Max just reported global subscriber gains of 7.2M — will Disney+ and Hulu follow suit? It’s hard to say, as Max had more room for growth than the latter two combined and launched in new markets recently. What will be more telling, at least initially, is how Disney’s churn rate fares. The driving factor behind Disney+’s integration of Hulu was to create a more seamless user experience for subscribers with a broader library of programming in order to improve customer retention. This will be a key signal of the company’s overall DTC health.

Regional Subscriber Breakdown

• Per Parrot Analytics regional subscriber estimates, Disney streaming lags far behind its major global SVOD competitors Netflix and Amazon Prime Video in Europe, Middle East, and Africa (EMEA) and Latin America (LATAM).
• Netflix has more than triple Disney+’s EMEA subscribers while Prime Video has more than double, according to Parrot Analytics Streaming Economics system. Netflix has more than double Disney+’s subscriber base in LATAM, while Prime Video has a 35% lead over Disney+.
• Adding Disney+Hotstar onto the Disney+ core subscribers puts Disney within striking distance of Netflix and Amazon Prime Video in the Asia Pacific (APAC) region.
• Netflix and Prime Video have prioritized heavily investing in local language content over the years, while Disney has focused more on exporting its English language content around the world.

Disney DTC Subscriber Breakdown

• As of June 2024, Parrot Analytics Streaming Economics data estimates EMEA accounted for the largest international share of Disney+ core subscribers, followed by LATAM, and then APAC.
• Disney+ Hotstar makes up the largest chunk of Disney DTC subscribers outside of UCAN. However, the much low ARPU associated with this segment — worth only about 15% of Disney+ core ARPU — makes this scale less valuable to Disney.
• The vast majority of Disney+ subscriber growth in the UCAN since Q3 2022 (~8M according to our model) comes from Disney’s agreement with Spectrum, revealing how this B2B partnership has benefited Disney+. Hulu has added nearly 4M since then.
• Disney is also utilizing other tools such as price hikes, an ad tier, and a password sharing crackdown to increase APRU across regions and head toward consistent DTC profitability.

Movies Power the Disney Flywheel

• During the first nine months of 2024, Disney+ was one of just two major streamers that has more demand for its movie catalog than its TV series in the US, and had the highest share of movie of any of the streamers analyzed.
• Generally speaking, TV series offer longer tails of engagement, though movies provide a consistent pop of acquisition power.
• This data reveals how much movies franchises and IP still catalyze the entire Disney entertainment flywheel.

Corporate Demand Share

• Corporate demand share assesses the long-term viability of the top media companies as they look to consolidate their original content’s availability exclusively onto their own platforms, and can effectively help value a conglomerate’s legacy and library content in aggregate.
• Disney has been the leading company in this category since Parrot began tracking this data in the 2010s.
• This data shows why Disney is positioned to handle the incoming industry tumult better than its legacy media peers NBCUniversal, Paramount, and Warner Bros. Discovery.

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