Netflix still dominates in total users and average revenue per user, but here’s who’s giving the streaming giant a run for its money
So how do the major streamers stack up? Well, analysts focus on two key metrics — total subscribers, especially new services looking to gain a foothold in the space and gain some scale to justify their heavy spending on content, and per user. Average revenue is a measure of just how much subscribers are contributing to the bottom line.
It’s worth noting that the two biggest streamers, Amazon Prime Video and AppleTV+, don’t release subscriber or ARPU figures. (Amazon said last year that more than 200 million Prime members streamed its content worldwide.) Both are divisions of tech giants for which video streaming is seen as a subsidiary operation, at least. for now.
netflix
Netflix gained 2.41 million paid subscribers in its third quarter, for a total of 223.09 million paid subscribers. The move came after the company reported its first decline in subscribers in the first two quarters in a decade — a blow that sent the share price into freefall and battered the entire streaming sector.
As a result, the company planned a cheaper $6.99-per-month ad-supported tier called “Basic with Ad” in the US and 11 other markets. There are no figures yet for the new service, which launched last month, but it is expected to generate a new revenue source without losing many existing customers looking for a less expensive alternative.
The executives also teased that Netflix will begin monetizing account sharing as early as 2023 as it seeks to tap into households that are giving their passwords to friends and family. The company previously estimated that 100 million households in the US and Canada are sharing passwords.
Looking ahead, the streaming behemoth is expecting to add 4.5 million paid subscribers in the fourth quarter, for a total of 227.59 million paid subscribers. But that transparency may soon be history. The company also said it will no longer provide guidance for paid subscriptions starting in the fourth quarter, but noted that it will continue to provide global and regional subscriber breakdowns.
In addition to dominating in total subscribers, Netflix leads the pack on average revenue per user, with $16.32 in the US and Canada, $10.81 in the Europe, Middle East and Africa region, $8.58 in Latin America and $8.58 in the Asia Pacific region. Has a ranking of 8.34. ,
Disney+
In the quarter ended September 30, Disney+ gained 12.1 million subscribers for a total of 164.2 million, up 39% from 118.1 million during the same period a year earlier. Despite the profit, the company’s direct-to-consumer division posted a record loss of $1.47 billion, with profitability for Disney+ not expected until September 2024 — assuming there isn’t an overall economic downturn.
A major factor in the dismal financial situation: Disney+ has lagged behind its rivals with an ARPU of only $6.10 domestically and $5.83 internationally, except for Indian service Disney+ Hotstar. When you take Hotstar into account, the ARPU figure comes down to 58 cents.
Disney’s disappointing earnings results prompted a leadership shakeup, with Bob Iger returning as CEO for the next two years, replacing his successor, Bob Chapek. Iger has already begun a reorganization of Disney’s media and entertainment distribution formed under Chapek, which includes the departure of DMED chief Kareem Daniels.
“Every transaction that happens at this company stems from some form of creativity, and that’s why it’s my No. 1 priority. That’s the focus,” Iger told Disney employees at a town hall on Nov. 28. It’s not about how much we make. It’s about how great things we make. That’s exactly what we’ll be focused on, with an incredible team of creative executives across the company.
Iger’s appointment comes ahead of the December 8 launch of Disney+’s $7.99 per month ad-supported tier. With the move, the monthly cost of ad-free Disney+ will increase from $7.99 to $10.99. Disney continues to take advantage of bundling with ESPN+ and Hulu, which accounted for more than 40% of household Disney+ subscribers at the end of the fiscal year.
Hulu
Hulu gained 3.4 million total subscribers during the quarter for a total of 47.2 million, compared to 43.8 million a year ago.
Hulu’s SVOD service had 42.8 million subscribers, up 8% from 39.7 million during the same period in 2021, while Hulu and Live TV made up the remaining 4.4 million subscribers, up 10% from 4 million during the same period in 2021 It was a jump.
Disney recently raised the price of ad-free and ad-supported Hulu to $14.99 and $7.99 per month, respectively. Beginning December 8, bundles with ad-supported Hulu will cost between $9.99 and $14.99 per month, while ad-free Hulu bundles will cost $19.99 per month. The Hulu and Live TV bundles will cost between $69.99 and $82.99 per month.
Hulu is actually No. 2 in ARPU among all the top streaming services, averaging $12.23 for its SVOD service. The combined ARPU of Hulu and Live TV and SVOD was $86.77.
One major question Iger will need to address is what Hulu’s future looks like within Disney’s overall streaming strategy. While Chapek previously expressed interest in combining Hulu with Disney+, doing so would require exercising the company’s option to buy Comcast’s minority stake in early January 2024.
HBO Max/Discovery+
Warner Bros. Discovery — which owns HBO, HBO Max and Discovery+ — reported a total of 94.9 million direct-to-consumer subscribers across all its platforms, an increase of 2.8 million from the previous quarter. This figure includes 53.5 million domestic customers and 41.4 million international customers.
The company is expected to spend up to $4.3 billion in pre-tax restructuring charges in October, according to a US Securities and Exchange Commission filing. The restructuring is expected to be substantially completed by the end of 2024 and result in approximately $3.5 billion in cost savings.
On the revenue side, Warner Bros. Discovery claimed a global ARPU of $7.52, domestic ARPU of $10.66 and international ARPU of $3.68.
Looking ahead, the company plans to combine HBO Max and Discovery+ into one streaming service, with a US rollout expected in the spring of 2023.
“By 2023, HBO Max will not have increased its price since launch,” said Jean-Bric Perret, president and CEO of Warner Bros. Discovery’s global streaming and interactive division. “So it would have been three years since the pricing shifted, which we think is an opportunity, especially in this environment.”
Paramount+
Paramount Global’s global direct-to-consumer base has grown to nearly 67 million subscribers, with Paramount+ gaining 4.6 million subscribers in its latest quarter for a total of 46 million. However, 1.9 million subscribers were dropped following the launch of its replacement, Skyshowtime, in the Nordic countries. Meanwhile, Pluto TV, the company’s free ad-supported streaming service, reached 72 million monthly active users globally.
The company hasn’t disclosed its average earnings per paying user, but Bloomberg Intelligence estimated that Paramount+’s global ARPU was $5.13 for its latest quarter.
During Paramount’s November 2 earnings call, CEO Bob Bakish warned that the company would undergo restructuring due to “ongoing macroeconomic pressures” affecting the industry and advertising market. Bakish said, “As we navigate this period, Paramount will continue to rely on the financially disciplined approach that has been our advantage in good times and bad.” “We have always been conscious of cost management as a company, and we are now taking additional steps to improve efficiency across our organization.”
The moves included the reorganization of Showtime and Paramount Television Studios into other parts of the company, and the reorientation of its international operations, marketing and advertising sales units. Taht led advertising sales, layoffs affecting the CBS Studios and Paramount Television Studios divisions, and an executive shakeup that promoted Amy Reisenbach to CBS Entertainment president.
Peacock
At the end of the third quarter, Comcast’s Peacock had more than 15 million paid subscribers in the United States. Additionally, executives noted on the company’s latest earnings call that Peacock had about 14 million bundled and free users — about 30 million monthly active accounts in total.
Comcast has not officially released ARPU figures for its streaming services, although NBCUniversal CEO Jeff Shell told CNBC on October 4 that Peacock is “doing ARPU closer to $10” on its paid customers.
Shell has also emphasized that Peacock’s long-term aspiration is to balance the company’s media business. “We have always said that our strategy in streaming is different from some of the premium SVOD players like Netflix and Disney+. We view it as a part of our business,” he explained. “We manage it as one. We decide on programming as one. We sell advertising as one across the business. And as viewership shifts from linear to Peacock, we want Peacock to reach a level and a scale that allows our business to balance as consumer sentiment and advertiser sentiment shift.
Looking ahead, the company expects Peacock losses for 2022 to be approximately $2.5 billion, with losses in the fourth quarter reflecting new material costs. In the third quarter, Peacock posted revenue of $506 million on an adjusted loss of $614 million.
