Earlier this year, Walt Disney's (NYSE:DIS) one-year-old namesake streaming service, Disney+, benefited from elevated demand as consumers sheltered at home. However, skeptics had concerns that the service's rapid growth could slow dramatically as more people started returning to work in Q3. While growth decelerated, it was still rapid. In fact, sequential growth in the new service far exceeded Netflix's (NASDAQ:NFLX) growth rate over the same period.
Also bolstering Disney's streaming service during the quarter was strong growth in the media company's other streaming offerings, ESPN+ and Hulu.
Here's a closer look at Disney's thriving streaming business.
From zero to 73.7 million
Disney+ subscribers hit 73.7 million by the end of the company's fiscal fourth quarter, which ended on Oct. 3. This was up from 57.5 million three months earlier.
Capturing how rapid this growth was, Disney+'s subscribers increased 28% sequentially. Comparing Netflix to Disney isn't fair, but just for context, the former's sequential growth over the same timeframe paled in comparison.
The streaming-TV giant added just 2.2 million subscribers in Q3, translating to 1% sequential growth. Of course, since Disney's new service has a much smaller base to grow on, investors should expect it to rise much faster than Netflix.
Impressively, Disney's achievement of 73.7 new subscribers comes less than 11 months after the service was launched.
Overall, Disney's fiscal fourth-quarter financial results were quite underwhelming. On an adjusted basis, Disney lost $0.20 per share during fiscal Q4, down from a profit of $1.07 in the same period last year. Revenue plummeted 23% year over year. The disruption to the company's business from COVID-19 persisted.
Nevertheless, there's a good reason for investors to be optimistic during these trying times. The company's streaming business is firing on all cylinders.
"The real bright spot has been our direct-to-consumer business, which is key to the future of our company," explained Disney CEO Bob Chapek in the company's fiscal fourth-quarter earnings release.
Looking beyond Disney+, the House of Mouse saw ESPN+ subscribers jump from 8.5 million at the end of fiscal Q3 to 10.3 million. This is notably nearly triple the 3.5 million ESPN+ subscribers the company had in the year-ago quarter. Total Hulu subscribers increased by more than one million sequentially and were up 28% year over year.
Disney has built a no-joke streaming business in just a few years' time. Altogether, the company now has nearly 121 million subscribers between its streaming services. This early momentum bodes well for the company's long-term goal to continue shifting its business to a direct-to-consumer model.