Following the recent announcement of Disney’s earnings results, where subscriber additions to streaming platforms exceeded expectations;

Francesca Gregory, Analyst in the Thematic Team at GlobalData, a leading data and analytics company, offers her view:

“While investors may breathe a sigh of relief at Disney’s positive results in the streaming department, they should be under no illusion that the streaming market’s growth can continue indefinitely or that Disney operates in a vacuum. Instead, Disney’s latest earnings show the company is well positioned to weather the post-peak stream wave as core markets in the US and UK reach a point of saturation.

“Disney’s presence in emerging markets has been a key strength of the company’s streaming offering. In the latest earnings round, Disney+ Hotstar performed the best, adding 14.9 million subscribers in the year from April 2021, a 42% increase. This provided a boost to total Disney+ subscriptions, which grew 33% compared to the previous year. Although the company initially lowered prices (relative to other markets) to capture viewers in India, Disney+ Hotstar revenues are now experiencing a meteoric rise. This strategy will continue to pay dividends, with GlobalData’s streaming video on demand (SVoD) market forecast predicting SVoD penetration in India to increase from 24% in 2021 to 42% in 2026*.

“The company is also well positioned to increase ad-based revenues as inflation saps subscribers’ disposable income. Disney+ plans to launch its ad supported tier in late 2022. Although this coincides with Netflix, Disney benefits from having already trialled this model across its other platforms. In the earnings call, Disney revealed how revenues across Disney+ Hotstar, ESPN+, and Hulu SVOD had been boosted by increases in per-subscriber advertising revenue. For now, it seems Netflix will need to play catch up.”

*Data taken from GlobalData’s India SVoD forecast.