Leaked Disney+ financials may shed light on recent price hike

A leak of data from Disney points to the Disney+ streaming service making about $2.4 billion in revenue in its fiscal quarter ending on March 30. Disney doesn't normally share how much revenue its individual streaming services generate, making this figure particularly interesting.

Leaked data

In August, Disney confirmed that it was investigating the leak of "over a terabyte of data from one of the communication systems" it uses. In a report this week, The Wall Street Journal (WSJ) said it looked over files leaked by a hacking group called Nullbulge that include "a range of financial and strategy information," apparent login credentials for parts of Disney's cloud infrastructure, and more. The leak includes over "44 million messages from Disney’s Slack workplace communications tool, upward of 18,800 spreadsheets, and at least 13,000 PDFs," WSJ said.

"We decline to comment on unverified information The Wall Street Journal has purportedly obtained as a result of a bad actor’s illegal activity,” a Disney spokesperson told WSJ.

$2.4 billion

According to WSJ, financial information came via "documents shared by staffers that detail company operations," adding, "It isn’t official data of the sort Disney discloses to Wall Street and might not reflect final financial performance for a given period.” That means we should take these figures with a grain of salt.

“Internal spreadsheets suggest that Disney+ generated more than $2.4 billion in revenue in the March quarter,” WSJ reported, referencing Disney's fiscal Q2 2024. "It underscores how significant a revenue contributor Hulu is, particularly as Disney seeks to buy out Comcast’s stake in that streaming service, and as the two sides spar over its value.”

The publication noted that the $2.4 billion figure represents “about 43 percent”—42.5 percent to be more precise—of the direct-to-consumer (DTC) revenue that Disney reported that quarter, which totaled $5,642,000,000 [PDF]. In its Q2 report, Disney put Disney+, Hulu, and Disney+ Hotstar under its DTC umbrella. DTC revenue in Q2 represented a 13 percent increase compared to the same quarter in the prior fiscal year.

Further, subscriber counts for Disney+ and Hulu increased year over year in Q2. The leaks didn’t specify how much revenue Disney’s streaming businesses made in Q3, but Disney reported that DTC revenue increased to $5.8 billion [PDF].

Right before announcing its Q3 numbers, though, Disney announced price hikes across Disney+, Hulu, and ESPN+ by as much as 25 percent. As we wrote at the time, the price hike seemed like an attempt to push people toward bundle packages offering a combination of Disney+, Hulu, and/or ESPN+ (bundles are supposed to make subscriber churn less likely). Disney CFO Hugh Johnston tried convincing us that Disney’s streaming catalog meant that it had “earned” the streaming price hikes.

Disney isn’t making much per Disney+ subscriber

If you've been following the streaming wars, you may have noticed a shift in focus from subscriber count to average revenue per user (ARPU).

If the leak is accurate (again, we can't be 100 percent positive that it is), then we can calculate that each Disney+ subscriber in Q2 accounted for about $5.21 in monthly Disney+ revenue ($2.4 billion divided by the subscriber count that quarter divided by three months). If you exclude Disney+ Hotstar (WSJ didn't specify if the leaked revenue number includes Hotstar), the number would rise to $6.80.

Those following along on Disney's earnings report may be thinking, “Wait, that's a lot less than Disney+'s reported ARPU that quarter." In Q2, Disney said that its average monthly revenue per paid subscriber for Disney+ decreased in the US/Canada market from $8.15 to $8.00. The higher figure incorporates advertising dollars and more, as Disney explained in its Q2 earnings report:

Disney+ average monthly revenue per paid subscriber is calculated using a daily average of paid subscribers for the period. Revenue includes subscription fees, advertising (excluding revenue earned from selling advertising spots to other Company businesses) and premium and feature add-on revenue but excludes Pay-Per-View revenue. Advertising revenue generated by content on one DTC streaming service that is accessed through another DTC streaming service by subscribers to both streaming services is allocated between both streaming services. The average revenue per paid subscriber is net of discounts on offerings that carry more than one service. Revenue is allocated to each service based on the relative retail or wholesale price of each service on a standalone basis.

With all this in mind, it may be oversimplifying to claim that in Q2, Disney made $5.21 per month per Disney+ subscriber. Additional factors also play into the final numbers. Still, the $5.21 figure highlights a gap where Disney could extract more money from subscribers and drive profitability after reaching streaming profitability for the first time in Q3 2024.

For comparison, in Netflix’s most recent earnings report for the period ending June 30 [PDF], Netflix reported $9,559,310,000 in revenue. Divided by 277 million subscribers, Netflix can attribute $11.50 per subscriber per month for that quarter. Netflix defines average revenue per membership as “streaming revenue divided by the average number of streaming paid memberships divided by the number of months in the period," minus sales taxes and VAT.

Various things contribute to a streaming service's price. Subscriber count, current profitability, content availability and budgets, and the ad market, for example, can all impact how much a streaming provider decides to charge. But no matter how you calculate it, the leak points to Disney+ making significantly less money per subscriber than streaming leader Netflix. With Disney previously claiming that prior price hikes didn't hurt Disney+'s subscriber count, charging more is an obvious way to try to close the gap between it and its biggest rivals.