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ESPN Plus, Hulu spur subscriber growth at Disney

The home screen of Disney's general entertainment streaming service Hulu.
The home screen of Disney’s general entertainment streaming service Hulu. (Graphic by The Desk)

Sports-centric streamer ESPN Plus was the fastest-growing streaming service owned by the Walt Disney Company this year, the company revealed in a quarterly earnings report on Tuesday.

During its most-recent financial quarter, Disney saw ESPN Plus grow by 1.5 million customers to 24.3 million subscribers, up from 22.8 million reported last quarter and a 47 percent increase from the 17.1 million customers it had this time last year.

Additional programming at ESPN Plus, including lucrative out-of-market rights to National Hockey League games and some simulcasts of Monday Night Football events, helped spur interest at the sports streaming service. The growth came despite a recent price increase that saw ESPN Plus jump to $10 a month or $100 a year for access to its live and on-demand sports programming.

Disney also reported gains at its Hulu subscription video on demand (SVOD) and live TV service, with Hulu grabbing 47.2 million subscribers during its latest financial quarter, a year-over-year increase of 8 percent. The SVOD service has the most subscribers at 43.8 million, compared to 4.4 million who pay for Hulu with Live TV.

The increase in subscribers came despite Hulu losing the NBC catalog of general entertainment and news programs, which shifted over to Comcast’s streaming service Peacock. It also marked a reversal for Hulu with Live TV, which reported a subscriber loss three months ago.

On a conference call with investors and reporters, Disney’s Chief Financial Officer Christine McCarthy said she expected consumers to continue moving away from cable or satellite services toward cheaper, online-only offerings the future.

While that trend has helped generate interest and subscriptions to Disney’s three streaming services, it has also impacted Disney’s traditional television business, with the company reporting a drop in revenue at its linear channels. Disney earned $6.335 billion in revenue from its channels.

Disney said its linear revenue was partially offset by higher fees charged to cable and satellite companies for the right to carry Disney-owned channels. That includes a recent agreement with Dish Network, which was briefly forced to pull around a dozen Disney-owned cable channels as well as ABC owned-and-operated stations from its satellite service and streamer Sling TV in early October. The channels were restored after about two days; Dish Network subsequently announced price increases across its subscription services as a result of the new agreement.

Streaming customers may not be able to escape the same fee increases for much longer: Just as Disney announced it would raise the price of ESPN Plus to $10 a month, it recently said it would impose similar fee increases on its Hulu and Disney Plus streaming services.

Customers of Disney Plus will have to fork over $11 a month for ad-free access to the streaming service, or agree to move to a lower, ad-supported tier for $8 a month. At Hulu, the ad-supported service that currently costs $6 a month will increase by $2, while the ad-free version will soon cost $15 a month.

The price hikes at Disney Plus and Hulu are scheduled to roll out in early December.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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