“Direct-to-consumer services grew to a combined 159 million total paid subscribers with management reiterating 230 million-260 million total subs by fiscal year 2024,” Morris noted, but highlighted: “Notably, 103.6 million global Disney+ subscribers was below our 108.9 million estimate, with average revenue per user also light” given its lower-ARPU Hotstar service in Asia is contributing a lot of user growth. “Pacing concerns will likely be the primary investor takeaway,” Morris concluded.
Juenger estimated that “core” Disney+, excluding Hotstar, added roughly 3 million subscribers in the latest quarter, compared with 13 million in the final quarter of 2020. “We estimate ex-Hotstar, Disney+ must average 5 million net adds per quarter – for the next 14 quarters – to achieve fiscal year ’24 guidance,” he explained. “Management told investors to expect a deceleration” over the next couple of quarters “due to Hotstar India and [a] delayed Latin America Star+ launch.
The analyst noted that management pointed out that the net adds pace accelerated in March, compared to January and February. “Plus there is whatever ‘pull forward’ distortion one ascribes,” Juenger wrote. “Although this surely should impact Disney+ differently/less than Netflix, given Disney+ only launched 1.5 years ago in the U.S., one year ago in most of Europe, and one quarter ago in Latin America.
They could right the ship by enticing Zack Snyder to craft his own Star Wars trilogy.
What do you think of this analysis from Luiz?
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