Can Disney Join Netflix as a Charter Member of the Profitable Streaming Club?

Seven big questions re: Disney streaming:
1) How much revenue is Disney generating from streaming/direct-to-consumer?
2) How much does Disney spend on content?
3) How many people subscribe to Disney’s streaming services?
4) How does Disney’s streaming churn compare to other services?
5) What share of total TV time do Disney+ and Hulu account for?
6) What share of total TV time does ESPN+ account for?
7) How does Disney make money?

Big question #1: How much revenue is Disney generating from streaming/direct-to-consumer?

Disney streaming/DTC revenue (YoY growth):
1) 2022-Q1 – $4.9B
2) 2023-Q1 – $5.0B (↑ 2%)
3) 2024-Q1 – $5.6B (↑ 13%)

Disney streaming/DTC profit (YoY growth):
1) 2022-Q1 – ($887M)
2) 2023-Q1 – ($659M) (↑ 26%)
3) 2024-Q1 – ($18M) (↑ 103%)

Big question #2: How much does Disney spend on content?

Quick answer: $25B, down 7% from last year. 

Big question #3: How many people subscribe to Disney’s streaming services?

Total Disney streaming subscribers (YoY growth):
1) 2021-Q1 – 159.0M
2) 2022-Q1 – 205.6M (↑ 29%)
3) 2023-Q1 – 231.3M (↑ 13%)
4) 2024-Q1 – 228.6M (↓ 1%)

Disney streaming subscribers by platform (% of total):
1) Disney+ – 153.6M (66%)
2) Hulu – 50.2M (22%)
3) ESPN+ – 24.8M (11%)
4) Total – 228.6M

Disney+ subscribers (YoY growth):
1) 2020-Q1 – 54.5M
2) 2021-Q1 – 103.6M (↑ 90%)
3) 2022-Q1 – 137.7M (↑ 33%)
4) 2023-Q1 – 157.8M (↓ 2%)
5) 2024-Q1 – 153.6M (↓ 3%)

Share of Disney+ subscribers outside the U.S./Canada:
1) 2021-Q1 – 64%
2) 2022-Q1 – 68%
3) 2023-Q1 – 71%
4) 2024-Q1 – 65%

Interesting: Disney+ and Hulu account for 26% of all streaming subscriptions in the U.S.

Big question #4: How does Disney’s streaming churn compare to other services?

Average monthly churn rate in 2023 by streaming service:
1) Disney+ – 4.5%
2) Hulu – 5.0%
3) Industry average – 5.5%

Why this matters: Streaming subscriptions are canceled on average after 18 months (churn).  Any streaming service that outperforms this benchmark will have an easier path to profitably and a seat at the final table of the Screen Wars.

Quick math for Disney+ churn:
1) Monthly churn – 4.5%
2) Customer lifetime – 22 months
3) Monthly subscription fee – ≈ $8
4) Lifetime value (LTV) – $179

Quick math for Hulu churn:
1) Monthly churn – 5.0%
2) Customer lifetime – 20 months
3) Monthly subscription fee – ≈ $12
4) Lifetime value (LTV) – $235

Flashback: Why Streaming Churn Matters

Big question #5: What share of total TV time do Disney+ and Hulu account for?

Quick answer: Hulu and Disney+ account for 5% of total TV time and 12% of streaming TV time.

Big question #6: What share of total TV time does ESPN+ account for?

Quick answer: ESPN+ accounts for 0.11% of total TV time and 0.29% of streaming TV time.

Big question #7: How does Disney make money?

Share of Disney revenue (% of total):
1) Entertainment – 45%
2) Experiences/Parks – 36%
3) Sports – 19%