In just 18 months at market, Disney+ surpassed 103 million subscribers worldwide—tripling its tally from a year ago.
Despite this rapid growth, the House of Mouse came up a little short on analysts’ predictions that 109.3 million people would be signed up for the service at this point, potentially indicating a slowdown similar to the one that has already affected Netflix.
Disney CEO Bob Chapek isn’t worried, however, because the company’s direct-to-consumer revenue was still up by 59% in Q2 2021, compared to the same period last year. In Disney’s latest quarterly earnings call, Chapek and CFO Christine McCarthy said that Disney+ is still on track to reach its target of 230 million to 260 million subscribers by the end of 2024.
Despite the streamer’s revenue growth, Disney’s media and entertainment distribution segment was down by 2% overall in Q2, due to a 36% dip in content sales and licensing, and a 4% drop in linear networks revenue.
The company is currently saving money on linear because more of its content costs are being allocated to Disney+, driving down production costs for the linear networks segment. It also saw savings from a channel closure strategy that has shuttered Disney Channel, Disney Junior and adult-focused offerings across Southeast Asia.
But the largest revenue decline came from the content sales and licensing arm, and is largely attributed to fewer tentpole entertainment titles being released over the past year. In contrast to Q2 2020, when Frozen II, Maleficent: Mistress of Evil, Ford v. Ferrari, Star Wars: The Rise of Skywalker and Onward were all in the market, this past quarter had just Soul and the tailwind of Mulan to drive sales.
Disney’s overall revenue was down 13% this quarter, primarily due to a continued slump in the parks, experiences and products segment that’s a byproduct of many parks remaining closed. Consumer products revenue, meanwhile, jumped by 13%.