Disney has confirmed that its total subscriber count across its streaming platforms now sits 221.1 million as of last month, ahead of Netflix who has just over 220 million.
Netflix has been suffering from lower subscriber numbers, losing over a million last quarter.
PP Foresight analyst Paolo Pescatore has said that this marks a “pivotal moment in the streaming wars.”
This “firmly underlines my belief that Disney is at a different phase of growth to Netflix.”
“There are still millions of users to acquire as it continues to expand into new markets and rolls out new blockbuster shows.”
However, Disney, who owns Hulu, ESPN+ and Disney+ estimate that their subscription count will drop due to the loss of streaming rights for cricket in India.
Subscription services saw a major boost in subscribers during the global pandemic, but growth for Disney hasn’t slowed down with restrictions lifting. Disney+ alone gained an additional 14.4 million subscribers during the quarter and rose to 152.1 million, far above estimates.
Despite their major growth, Disney saw their streaming service lose them $1.1 billion (A$1.6 billion) in the quarter, due to their low subscription cost in the US of only $7.99 (A$11.29), where Netflix starts at $9.99 (A$14.12) for the basic subscription.
To recoup losses, Disney plans to launch an ad-tier subscription of the service which will cost the same as the current offering, whilst an ad-free tier will cost $10.99 (A$15.53). The service will launch in the US later this year and will reach other countries next year.
Company executives believe that the price hike won’t turn off subscribers and claim to have received strong interest from potential customers looking to advertise on the platform.
“We are in a position of strength with record upfront advertising commitment,” said chief executive Bob Chapek in a conference call with analysts.
Netflix has also announced an ad-tier which will cost less than the current subscription, whiles Amazon Prime also shows ads.
Disney’s losses for the year have been countered by increased attendance at their theme parks, following the lifting of restrictions. Total revenue saw a 26% increase from April to June last year, with profits reaching $1.5 billion (A$2.12 billion).
However, as an unstable economic climate approaches, more and more people are looking to reduce costs, and subscription services are at the top of the list, with cancellations being led by those under 24.
