Disney CEO projects lower fourth-quarter subscriber growth than estimates
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Tom Hiddleston stars as Loki in the Disney+ series “Loki.”
Disney
Disney‘s CEO Bob Chapek said Tuesday that his company’s streaming service growth has “hit some headwinds” related to coronavirus, causing shares to drop more than 3%.
Chapek indicated that Disney plans to increase its streaming subscriber base by “low single-digitmillions” in the fourth quarter. Disney shares fell 3.6% at 2:59 p.m. New York time after Chapek’s comments at the virtual Goldman Sachs Communacopia Conference.
Chapek said “mobilizing partners” in Latin America to push Disney’s new Star+ streaming service, the Covid-related suspension of the India Premier League, whose games air on Disney’s Hotstar, and production delays from the delta variant have all hurt subscriber numbers in the fourth quarter.
Chapek stated that “we are going to hear a bit more noise than the Street projects quarter-to quarter.” The resurgences of Covid, delta had an impact on some of our productions.
Chapek’s forecast is considerably lower than analyst estimates. Bryan Kraft from Deutsche Bank had forecast that Disney+ would add approximately 13 million net in the third quarter.
Chapek indicated that there will not be any global production delays in the near future. However, he said that there wouldn’t be any new programming for the fourth quarter as “than we might expect,” which will impact subscriber growth.
Disney expects between 230 and 260 millions Disney+ subscribers by 2024. Disney said in August it had 116 million Disney+ subscribers.
Chapek reminded investors that quarters-to-quarter growth was not linear, and some choppiness can be expected. He was still confident about Disney’s long term growth prospects.
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