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August 11, 2022

ESPN+ adds 500k subscribers, Disney Q3 revenue up to $21.5bn

Disney's streaming platform enjoyed a significant rise in subscribers for third quarter of 2022.

By Tariq Saleh

ESPN+, the sports streaming service owned by US media giant Walt Disney, has added 500,000 subscribers in the third quarter of 2022, taking its overall subscriber base to almost 23 million.

As part of its Q3 earnings for the year, Disney revealed the significant growth its flagship direct-to-consumer (DTC) OTT offering has experienced over the past 12 months.

At the end of June, the subscriber base for ESPN+ stood at 22.8 million, up 53% from 14.9 million last year.

Disney’s other streaming services, Disney+ and Hulu, also saw subscriber growth during the quarter.

Disney+ added 14.4 million subscribers during the period to jump up to 152 million worldwide, while Hulu gained 600,000 subscribers to climb to 46.2 million globally.

In total, Disney’s streaming platforms have 221.1 million customers. Notably, Netflix, Disney’s major competitor in this space, reported having 220 million subscribers at the end of Q2 recently.

While Disney’s linear television revenue was relatively flat, rising 3% year-over-year (YoY) to $7.2 billion, direct-to-consumer income was up 19% to $5.1 billion.

The media heavyweight has already announced it will increase the subscription price of ESPN+ by 43% as it looks to boost revenue for its loss-making streaming division.

From August 23, the monthly price for ESPN+ will rise from $6.99 per month to $9.99, while annual pricing will increase from $69.99 to $99.99. The price of the larger Disney streaming bundle, which includes ESPN+, Disney+, and Hulu, remains at $13.99 per month.

The decision was taken as Disney seeks to boost its revenue after posting a loss of $887 million for the second quarter for its streaming division – up from $290 million the year before.

ESPN is also looking to recover some revenue after renewing and adding several sports rights, including the National Football League’s (NFL) ‘Monday Night Football’ package, which will cost the company $2.6 billion per year. As part of that deal, Disney has the right to simulcast the package on ESPN+ when the company chooses.

ESPN+ has continued to bolster its portfolio, particularly its live soccer offering, and this week retained rights to Spain’s Copa del Rey knockout cup competition and Super Cup, as well as the English Football League (EFL) and Carabao Cup, and Germany’s DFB-Pokal.

The service already holds rights to Spain’s top-tier LaLiga and the German Bundesliga.  

In recent months, ESPN+ added new content including American football's Canadian Football League and XFL (to begin in 2023), and soccer’s UEFA Women's Euro 2022.

As well as NFL games, the platform also shows the Wimbledon and Australian Open tennis grand slams and also recently embedded ice hockey’s NHL.tv out-of-market package and golf’s PGA Tour Live which were previously subscription products that cost $9.99 per month each by themselves.

Disney reportedly considered spinning off ESPN to focus fully on its DTC offering before deciding to keep the major linear network as it competes with tech giants in the media industry.

However, chief executive Bob Chapek revealed Disney is considering what “ESPN would look like in a true DTC future,” adding that “we’ve negotiated flexibility into our new rights agreements.”

Overall, Disney’s Q3 revenue was up 26% YoY to $21.5 billion for the fiscal quarter ending July 2.

Chapek also hinted that the company could soon announce a partnership with a sports betting operator to integrate betting opportunities with broadcasts.

He said: “Our sports fans that are under 30 absolutely require this type of [sports betting] utility.”

In terms of Disney’s premium sports rights, Chapek stated it is “definitely interested in renewing” its partnership with the NBA. ESPN’s present nine-year deal for the top basketball league expires at the end of the 2024-25 season.

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