While Netflix Reels, Disney Plus Adds Another 7.9 Million Subscribers

Disney Plus just showed up Netflix.

After Netflix stunned Wall Street by losing subscribers for the first time in a decade, Disney said Wednesday that its flagship streaming service is still chugging along nicely. Disney Plus added 7.9 million paying customers during the second quarter of fiscal 2022, beating Wall Street’s expectations of about 5 million. That brings Disney Plus to 137.7 million total subscribers.

The Burbank-based media giant’s strong showing comes amid growing concerns with the streaming business. Netflix’s poor earnings and the rapid demise of CNN Plus have rattled investors, who previously rewarded entertainment and tech titans that spent billions to launch streaming platforms and added many subscribers during the pandemic.

Now, Netflix’s stock has plunged 70% over the last six months. The company lost 200,000 subscribers during its first quarter and expects to lose 2 million more in the current quarter. Netflix blamed the subscriber slowdown on increased competition, password sharing and the war in Ukraine, among other things. And recent surveys show consumers are canceling subscriptions they believe are too costly.

“The business model isn’t as attractive as once thought due to the intensifying competition for time, attention and consumer spending,” media analysts Robert Fishman and Michael Nathanson of MoffettNathanson wrote in a recent report.

The problems facing Netflix don’t seem to be holding back Disney Plus—at least not yet. Executives told analysts that the service had a “stronger than expected” first half of the fiscal year and that it is expected to add more subscribers during the final six months, though maybe not by much. The company’s goal of hitting at least 230 million Disney Plus subscribers by 2024 is still on track, CEO Bob Chapek said.

“The growth of the platform since its launch reinforces its unique nature. Quite simply, we believe Disney Plus is one of a kind,” Chapek said. He later touted that, despite Disney’s family-friendly branding, almost half of Disney Plus subscribers were adults without kids.

Disney Plus may still be growing, but streaming is costing the company a lot of money. Disney’s direct-to-consumer division, which also includes Hulu and ESPN Plus, lost $887 million during the second quarter—more than triple the loss from a year ago. Disney executives expect its flagship service to become profitable in 2024.

Overall, Disney’s revenues rose 23% year-over-year to $19.2 billion during the second quarter. Net profits were down 48% to $470 million.

Despite avoiding Netflix’s fate—for now—Wall Street wasn’t impressed. The company’s shares slid more than 2%, to $102.75, as of 3:09 p.m. PT in after-hours trading.