Disney lures wave of streaming subscribers as Netflix falters

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Disney has revealed it attracted a wave of new subscribers for its Disney+ streaming service after rival Netflix reported a fall in numbers.

The entertainment giant picked up 7.9m new subscribers in the three months to March, beating Wall Street expectations of 5.3m and its rival Netflix, which had lost 200,000 customers in the same period.

Disney still has a long way to go to hit ambitious, multi-year targets, but the growth comes as a relief for investors.

Netflix’s fall was the first time in over a decade, amid concerns that the cost-of-living crisis is pushing households to cut non-essential spending while the number of competitors keeps growing.

Shares in Netflix have tumbled by more than half since the results and other media stocks were hit too. Disney was down by 2.5pc on Wednesday night in after hours trading.

Disney needs to gain at least 9.1m new customers per quarter to reach its goal of adding 230m to 260m Disney+ subscribers by September 2024.

Total subscriptions for Disney+, launched in November 2019, reached 137.7m, with help from new releases including Marvel's Moon Knight series and Pixar movie Turning Red.

Disney’s other streaming services, Hulu and ESPN+, posted total subscribers of 45.6m and 22.3m respectively.

Quarterly revenue climbed 23pc to $19.2bn (£15.7bn), missing analysts’ estimates of $20bn. Profits were 10pc lower at $1.1bn.

The theme park business continued to rebound after extended pandemic closures and attendance restrictions.

However, Disney expects a $350m hit in the current quarter as some theme parks in Asia are closed due to lockdowns.

The company remains in the crosshairs of Republican lawmakers and Florida Gov. Ron DeSantis over its opposition to a new state law barring instruction on sexual orientation and gender identity in kindergarten through third grade.

Mr DeSantis signed a bill last month to dissolve the private government Walt Disney World controls on its property in the state in retaliation.

In February, chief Bob Chapek again warned of a challenging first half but predicted streaming subscriber growth would accelerate in the second half of the year, when new film and TV projects are ready and new markets are added.

Streaming video is a key growth area for Disney, which like other media companies is seeing a dwindling audience for traditional TV.

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