By Lisa Richwine and Dawn Chmielewski
LOS ANGELES (Reuters) -Walt Disney Co lowered its long-term subscriber forecast for Disney+ customers on Wednesday, blaming the loss of cricket rights in India, but stuck with its target date for turning a profit from the company’s big push into streaming television.
To protect streaming margins, the media giant announced it will raise the price of the ad-free version of Disney+ by nearly 38% when it launches an option with advertising in December.
The company now projects between 215 million and 245 million total Disney+ customers by the end of September 2024. That is down from the 230 million to 260 million which Disney had been forecasting.
The adjustment came from reduced expectations for India, where the company is losing streaming rights for Indian Premier League cricket matches.
For the first time, Disney broke out estimates for Disney+ Hotstar customers in India from the rest of Disney+.
Chief Financial Officer Christine McCarthy said Disney expected to add 80 million Disney+ Hotstar customers by September 2024, and between 135 million and 165 million others.
The company still expects its streaming TV unit to turn a profit in fiscal 2024, McCarthy said.
The version of Disney+ with advertising will debut on Dec. 8 at a cost of $7.99 a month, the same price the company now charges for the ad-free version, Disney said. The cost of Disney+ without ads will increase to $10.99 as of that date.
Prices for Hulu, also owned by Disney, will rise by $1 to $2 per month depending on the plan.
Disney in 2017 staked its future on building a streaming service to rival Netflix Inc as audiences moved to online viewing from traditional cable and broadcast television.
In the just-ended quarter, Disney edged past Netflix in total streaming customers. The Mouse House added 14.4 million Disney+ customers, beating the consensus of 10 million expected by analysts polled by FactSet, as it released “Star Wars” series “Obi-Wan Kenobi” and Marvel’s “Ms. Marvel.”
Combined with Hulu and ESPN+, Disney said it had 221.1 million streaming subscribers at the end of the June quarter. Netflix said it had 220.7 million streaming subscribers.
Disney posted adjusted earnings-per-share of $1.09, up 36% from a year earlier, as visitors packed its theme parks. Operating income more than doubled at the parks, experiences and products division to $3.6 billion.
Disney’s streaming effort is still losing money, reporting a loss of $1.1 billion for the quarter. That put a drag on the media and entertainment unit, whose profit declined by 32% to nearly $1.4 billion.
Overall revenue rose 26% from a year earlier to $21.5 billion. A consensus of analysts polled by Refinitiv had projected revenue of $20.96 billion.
(Reporting by Lisa Richwine and Dawn Chmielewski in Los AngelesEditing by Kenneth Li, Peter Henderson and Matthew Lewis)
