Reopening Hurts Disney as Streaming Business Sees Slowing Growth

By Adriaan Brits Friday, May 14, 2021

Disney stock is down 3.5% in pre-market trading Friday after the company reported slowing growth for its streaming business services Disney Plus, ESPN Plus, Hulu, and Hotstar.

Minnie Mouse at a parade.

Focus Back to Reopening and Disney World

Disney reported Q2 earnings per share (EPS) of $0.79 per share compared to the $0.27 per share expected from market analysts. However, Disney stock fell as business sales slowed down in Q2, as they came in at $15.61 billion vs. $15.87 billion expected in the analysts’ survey.

“We’re pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations while also fueling long-term growth for the Company,” said Bob Chapek, CEO of The Walt Disney Company.

“This is clearly reflected in the reopening of our theme parks and resorts, increased production at our studios, [and] the continued success of our streaming services,” Chapek added, before adding that and the company further expanded its business portfolio by signing new multi-year sports rights deals for ESPN and ESPN Plus.

Moreover, the company delivered a miss on subscriber estimates for Disney Plus as it now has 103.6 million paid subscribers, much lower than the expected 109 million. Across all streaming platforms, Disney now serves about 159 million total subscribers. Hulu alone has 41.6 million subscribers, up 30% year-over-year (YOY).

This shows slowing growth of the company’s streaming business as people now tend to spend more time outside rather than watching Disney Plus, ESPN Plus, Hulu, and Hotstar. Despite the miss, the company reiterated its projections to have between 230 million and 260 million subscribers at Disney Plus by 2024.

The company also reported average monthly revenue per user of $3.99, which marks a 29% decrease YOY. The company attributed lower reported figures in this sector to the launch of Disney Plus Hotstar. Excluding Hotstar, the average revenue per paid Disney Plus subscriber is $5.61. For ESPN Plus, the average monthly revenue per paid subscriber soared from $4.24 to $4.55 due to an increase in retail pricing.

Business revenues from the Direct-to-Consumer (DTC) sector soared 59% to $4.0 billion, while the operating loss fell from $0.8 billion to $0.3 billion. This came after the company witnessed improved results at Hulu, and to a lesser extent, at ESPN Plus.

Disney added that ESPN Plus sales were boosted by subscriber growth and higher income from Ultimate Fighting Championship (UFC) pay-per-view events. Hulu, on the other hand, generated more income from subscription revenue growth and higher advertising revenue.

Given the notable slowing down of its streaming business, the company’s focus now shifts back to the gradual reopening of Disney World. Revenue at Disney World theme parks plunged by 44% to $3.2 billion, as many are still either closed or operating at limited capacity. Disney stock was also negatively impacted by the fact that Disney World cost around $1.2 billion in lost business income in Q2.

In March, CEO Chapek announced plans that Disney World theme park will open on April 30. This is one of the reasons why business investors believe Disney stock could outperform in Q3 as business revenues from Disney World theme parks were not reflected in Q2 numbers.

The company said it is “very encouraged by the initial guest response,” while Chapek added he expects “attendance [to] go up significantly” going forward.

Disney stock is down 1.5% since the beginning of the year.


Disney stock fell in pre-open Friday trading after the company reported slowing growth for its streaming platforms Disney Plus, ESPN Plus, Hulu, and Hotstar. On the other hand, it reported significant progress made with the reopening of Disney World theme parks.

About the Author

Headshot of Adriaan Brits

An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.

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