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During the January to March quarter, the
Disney+ streaming service was aided by box office heavyweight
Marvel Studios. The producer of blockbuster superhero films
released its first TV series, "WandaVision," in January followed
by "The Falcon and the Winter Soldier" in late March.
The animated Disney movie "Raya and the Last Dragon" was offered
to Disney+ customers in March for $30, at the same time it was
shown in theaters, which are struggling to rebound from the
global health crisis.
Chief Executive Bob Chapek said in early March that Disney+ had
reached 100 million subscribers worldwide. That number likely
swelled to 110 million by the end of March, MoffettNathanson
analyst Michael Nathanson said.
The rapid build-up has made Disney+ the most formidable
challenger to Netflix Inc, which pioneered movie and TV
streaming in 2007, and reached 207.6 million customers as of
March.
Competitors including AT&T Inc's HBO Max, ViacomCBS Inc's
Paramount+ and Comcast Corp's Peacock also have picked up
customers during the pandemic.
A big question is whether streaming growth can be sustained as
movie theaters reopen and people who have been vaccinated emerge
from their homes to enjoy summertime activities outside.
Netflix reported in April dramatically slowing new sign-ups this
year, after a boost during the pandemic.
Disney's streaming media division, known as direct-to-consumer,
is losing money as it pays for new programming, marketing and
rollout around the world. Analysts expect a $673 million
quarterly loss for the unit, according to IBES data from
Refinitiv.
Overall, analysts project the Mouse House to report
earnings-per-share of 28 cents for the quarter and revenue of
$15.9 billion.
Outside of streaming, Disney's parks remain under pressure from
extended pandemic-induced shutdowns and safety measures. The
California and Paris Disneylands were closed during the quarter,
and parks that were open capped attendance to allow for social
distancing. Disney cruise ships remain idle.
Edward Jones analyst Dave Heger, who rates Disney a "buy," said
he expects those operations will rebound as the pandemic eases.
"We feel that these businesses will recover due to strong
creative franchises and a loyal customer base," Heger said in a
research note.
(Reporting by Lisa Richwine; Editing by Karishma Singh)
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