M+E Connections

Disney has restarted or completed production on all the TV projects across the company that were previously impacted by the COVID-19 pandemic, and expects to have “eight new projects up and running by January,” according to Bob Chapek, the company’s CEO.

For now, however, the Disney Plus direct-to-consumer (DTC) streaming service has continued to be the star attraction for Disney when it comes to film distribution, with theatrical movie releases still largely on pause.

Disney Plus paid subscriptions grew to more than 73 million paid subscribers by the end of Disney’s fourth quarter (ended Oct. 3), Chapek said Nov. 12 on an earnings call. That means Disney Plus is “far surpassing our expectations in just its first year, and we’re continuing to see positive trends,” he told analysts.

Disney Plus ended Q4 with 73.7 million paid subscribers, to be exact, or an increase of over 16 million subscribers compared to the end of Q3, Disney CFO Christine McCarthy noted.

Pandemic Impact

“While the pandemic continues to impact our company… the prolonged situation has prompted us to find new and innovative ways to deal with the difficult and often unpredictable challenges we’re facing,” Chapek said on the call.

Disney “successfully made adjustments and have resumed many of our operations,” he told analysts. “While many of our productions were shut down beginning in March due to COVID, our animation teams were able to work remotely and have continued production uninterrupted during the pandemic,” he pointed out.

The company was “fortunate to keep other parts of our creative pipeline active and to continue post-production work for our Media Networks studios and Disney Plus,” he said.

Disney was “able to develop processes and institute health and safety measures that have made it possible to resume live-action production,” he said, adding: “On the studio side, we have restarted or completed production on all of the projects previously impacted by COVID, including ones from our Marvel Studios, 20th Century Studios, Searchlight Pictures, Disney live action and Lucasfilm.”

For TV, Disney now has “more than 100 live-action scripted and unscripted projects in active production with dozens more in various stages of pre- or post-production,” he also said.

However, he conceded that “the unpredictability of COVID may result in unforeseen impacts to current and future productions.”

More Streaming Service Updates

Disney had rolled out Hulu Plus in more than 20 countries globally as of Nov. 12. On Nov. 17, “we will launch in Latin America, including Brazil, Mexico, Chile and Argentina, followed by more overseas markets in the coming year,” Chapek said..

Looking across the full suite of Disney streaming services, the company has “exceeded 120 million paid subscriptions worldwide, with impressive subscriber gains for ESPN Plus and Hulu, including the rapidly growing Hulu Plus Live TV,” he told analysts.

The company expects the international launch of its planned Star-branded general entertainment streaming service internationally in 2021 “will enable us to grow our business even further in the years ahead,” he said.

Hulu ended Q4 with 36.6 million paid subscribers, up from 28.5 million a year earlier, Disney said. Meanwhile, Disney’s ESPN Plus streaming service ended Q4 with 10.3 million paid subscribers, up from 3.5 million.

Disney Plus overall average revenue per user in Q4 was $4.52. However, excluding Disney Plus Hotstar, it was $5.30, the company noted.

The company recently charged Disney Plus subscribers an additional $29.99 to watch the live-action “Mulan” on a “premier access basis” after that film’s U.S. theatrical release plans were delayed and then scrapped due to the pandemic.

However, its upcoming Disney/Pixar animated film “Soul” – another planned theatrical release – will be made available on Disney Plus on Christmas Day at no extra charge, Chapek noted.

Q4 Results Standouts

Although Disney’s overall results continue to be hurt by the pandemic, revenue in its DTC & International and Media Networks businesses fared well in Q4.

DTC & International revenue soared 41% from a year earlier to $4.9 billion, while Media Networks revenue increased 11% to $7.2 billion and segment operating income grew 5% to $1.9 billion.

Within Media Networks, Cable Networks revenue grew 11% to $4.7 billion, while Broadcasting revenue jumped 10% to $2.5 billion and operating income soared 47% to $553 million.