Disney+ subscribers keep growing, but they’re making Disney less money

Not every subscription is the same.
Not every subscription is the same.
Image: Reuters/Dado Ruvic
We may earn a commission from links on this page.

Disney’s flagship streaming service, Disney+, is growing faster than anyone anticipated—including Disney. But that growth doesn’t tell the whole story.

Disney+ now boasts 95 million global subscribers, the company revealed today in its fiscal first-quarter earnings report (pdf). That’s up from 74 million in October and just 27 million this time a year ago. Disney didn’t think it would hit that number for several more years, so it’s giving itself a much higher goal. It now expects Disney+ to have about 250 million subscribers by 2024. Since launching in the US in November of 2019, the service is available in more than 40 countries.

And that’s where the catch comes in. In two key markets—India and Indonesia—a Disney+ subscription is significantly cheaper than it is in the US and other countries. Disney’s streaming subscribers are skyrocketing, but the average amount of money the company makes on those users is doing the opposite.

The average revenue per user (ARPU) of Disney+ dropped to just over $4 this quarter, down from $5.56 last year. In April, Disney+ launched in India as a rebrand of Disney’s existing Hotstar service in the country. Then, in September, Disney launched Disney+ Hotstar in Indonesia. Both launches helped Disney accumulate more global subscribers—but they also decreased the platform’s ARPU.

The “VIP” tier of Disney+ Hotstar in India costs 399 rupees per year—the equivalent of roughly 45 US cents per month. Disney+ in the US costs more than 15 times that.

Netflix, by comparison, has an ARPU of about $11. Disney’s other streaming services—ESPN+ and Hulu, which are not available in India or Indonesia—did not see similar drops in ARPU. In fact, they’ve each gone up since last year.

So while Disney+’s eye-popping subscriber statistics are meaningful, its ARPU shows the weakness of looking at them as the sole metric to evaluate the service’s position in the market. Still, it’s difficult to argue that Disney+ has been anything other than a mammoth success for the Mouse House. The launch has been so strong that Disney is already raising prices on subscriptions in the US.