After chasing Netflix into streaming, the legacy media giants’ big bet on going direct-to-consumer appears to finally be paying off.
Nearly all the major streamers posted profits during their latest round of earnings, with the improvements fueled by growth in subscribers and overall DTC revenue, as well as price increases, bundling and companies’ continued cost-cutting efforts.
Netflix continued to lead the pack on the subscriber front, adding a total of 5.07 million paid subscribers for a total of 282.72 million globally — up 14.4% year over year. Rounding out the top three was Disney+, which added 4.8 million subscribers for a total of 158.6 million, and Warner Bros. Discovery with 110.5 million DTC subscribers after adding 7.2 million, its largest quarterly subscriber growth since the launch of Max.
Paramount+ came in fourth, adding 3.5 million for a total of 72 million subscribers, followed by Hulu 900,000 subscriber additions for a total of 52 million, Peacock with 3 million paid subscribers for a total of 36 million and ESPN+ with 700,000 subscriber additions for a total of 25.6 million.
Netflix also continued to dominate in average revenue per user (ARPU) domestically, growing 5% year over year to $17.06 in its latest quarter, though that was down from $17.17 in the previous quarter.
On the legacy media front, Hulu led with ARPU of $12.53, followed by WBD with $11.99. Trailing them were Peacock, which has previously disclosed its ARPU is roughly $10, Disney+ with $7.70 and ESPN+ with $5.94. Paramount+ doesn’t break out its ARPU, but touted an 11% increase globally during its third quarter.
As it shifts its focus to revenue, operating margins and engagement, Netflix will stop reporting its quarterly subscriber count and average revenue-per-paid member figures beginning in the first quarter of 2025. The company said it will continue to provide a breakout of revenue by region, as well as the impact of foreign exchange changes and announce major subscriber milestones as it crosses them.
This analysis does not include Prime Video or Apple TV+, which do not disclose quarterly subscriber and ARPU figures. Following the launch of its ad-supported offering in January, Prime Video revealed its brands can reach 200 million monthly viewers, including 115 million in the U.S. In February, Amazon CEO Andy Jassy said the company has “increasing conviction” that Prime Video will become a “large and profitable business on its own.”
Netflix
Netflix’s total subscriber figure includes 690,000 additions in the U.S. and Canada for a total of 84.8 million in North America, along with 2.17 million more in the Europe, Middle East and Africa region for a total of 96.13 million, and 2.28 million adds in the Asia-Pacific (APAC) region for a total of 52.6 million.
Latin America was a weak spot, with the company shedding 70,000 subscribers to drop to 49.18 million due to recent price changes and a softer content slate. However, membership growth in the region has started to rebound during the fourth quarter of 2024, the company said.
Revenue for the quarter grew 16% to $4.32 billion in the U.S. and Canada, driven by 10% growth in average paid memberships. The EMEA region grew revenue 16% to $3.13 billion, consistent with the increase in average paid memberships, while its ARPU for the area was flat at $10.99 per user. APAC saw revenue grow 19% to $1.13 billion on product improvements, market fit and strong local content slates in Japan, Korea, Thailand and India, though ARPU fell 4% to $7.31 per user. LATAM revenue rose 9% to $1.24 billion and ARPU fell 5% to $8.40.
Since launching two years ago, Netflix’s ad tier has grown to 70 million monthly active users globally and accounts for over half of new sign-ups in 12 countries where the offering is available. Ad plan members are watching a similar amount of viewing hours and titles compared to non-ad plan members, co-CEO Greg Peters said.
Netflix said it is on track to reach “critical ad subscriber scale” in 2025. Ad revenue will roughly double year over year, though it won’t be a primary driver of overall revenue growth that year. The company plans to roll out its in-house advertising technology globally through 2025; Canada is already operating solely on the new platform.
Netflix recently phased out its basic plan in the U.S. and France and will do so in Brazil in Q4. It also raised prices in countries including Japan, Spain and Italy.
“Our core theory is we’ve got to work really, really hard to make sure that we are delivering more value to members every quarter, and then we sort of assess based on metrics like engagement, like acquisition, retention,” Peters told analysts when asked about a U.S. price increase. “We’ll look at those signals, and we’ll figure out where and when we think it’s appropriate to ask those members to pay a little bit more as well.”
Disney+, Hulu and ESPN+
Disney’s streaming business ended 2024 with a combined profit of $321 million for its fiscal fourth quarter and $134 million for the full year. That compared to losses of $387 million in the year-ago period and $2.6 billion loss in fiscal 2023. The fiscal Q4 DTC profit almost offset the declining linear business’ 38% profit plunge to $489 million.
Entertainment DTC delivered $253 million in operating income, up from a loss of $420 million, led by subscription revenue growth of 15% to $5.78 billion from price increases and subscriber additions.ESPN+ posted a profit of $68 million, compared to a profit of $33 million a year ago.
Collectively, Disney reported a total of 236.2 million subscribers across Disney+, Hulu and ESPN+, up nearly 3% from 229.8 million in the third quarter of 2024, and total DTC revenue of $6.3 billion in Q4 and $24.94 billion for the full year, up 13% and 14%, respectively.
Disney+ reported a total of 158.6 million subscribers, compared to a total of 153.8 million in the previous quarter. Disney+ Core subscribers grew 4% to 122.7 million, including 56 million domestically and 66.7 million internationally. Disney+ Hotstar grew 1% to 35.5 million subscribers.
Disney+’s 1% decrease in domestic ARPU was due to a higher mix of ad-supported and wholesale subscribers, partially offset by higher ad revenue. International ARPU, excluding Hotstar, grew 3% to $6.95, due to higher pricing offset by a higher mix of ad-supported and wholesale subscribers and unfavorable foreign exchange impact. Hotstar ARPU fell 26% to 78 cents, due to lower advertising revenue.
Hulu’s total subscriber base grew 2% to 52 million, including 47.4 million SVOD-only subscribers and 4.6 million Hulu + Live TV subscribers. Hulu SVOD only ARPU fell 1% to $12.54, primarily due to a higher mix of subscribers to multi-product offerings and lower advertising revenue, while Hulu + Live TV ARPU was flat at $95.82.
ESPN+ subscribers grew 3% from the previous quarter to 25.6 million with the service’s ARPU falling 5% to $5.94 due to lower advertising revenue and a higher mix of subscribers to wholesale and multi-product offerings.
CEO Bob Iger said Disney has launched its password sharing crackdown in over 130 countries and rolled it out in Latin America earlier this month. Disney+ will launch an ESPN tile within the service on Dec. 4.ESPN’s upcoming direct-to-consumer service, internally codenamed Flagship, will be available in Disney+ and within the ESPN app in early fall 2025.
In fiscal 2025, Entertainment DTC will report an $875 million increase compared to the previous year, which includes an adverse impact from the India business of about $200 million. It also expects a “modest decline” of Disney+ core subscribers compared to Q4 2024.
“We expect our [streaming] growth to come from a balance of pricing as well as [subscriber] growth,” Disney CFO Hugh Johnston said. “We’re going to read the market and we can react to it as it plays out, but our expectation right now is it will be both subs and pricing, a little bit more tilted towards pricing.”
Disney raised prices in October as it looks to move more consumers to ad-supported plans, which are being purchased by 60% of all new subscribers, including 37% of subscribers in the U.S. and 30% of global subscribers.
In fiscal 2026, Disney expects a 10% operating margin for its Entertainment DTC business, excluding Hulu + Live TV. Johnston declined to discuss ARPU for ESPN Flagship, but said it would be “additive” to the company in 2026, despite an investment baked into its 2025 guidance.
Warner Bros. Discovery
Warner Bros. Discovery’s direct-to-consumer division, which includes Max, Discovery+ and HBO cable subscriptions, posted a profit of $289 million during its third quarter of 2024, fueled by its largest-ever quarter of subscriber growth since the launch of Max last year, compared to a profit of $111 million. The figure included a $41 million loss from the broadcast of the Olympics in Europe.
WBD added 7.2 million subscribers for a total of 110.5 million globally, including 52.6 million domestic subscribers and 57.9 million international subscribers.
DTC revenue grew 8% to $2.6 billion, compared to $2.44 billion in the year-ago period. ARPU came in at $11.99 domestically, $4.05 internationally and $7.84 globally.
Distribution revenue climbed 6% to $2.32 billIon, primarily driven by a 15% increase in subscribers and higher pricing, after WBD launched Max in Latin America and Europe during the first half of 2024. Advertising revenue rose 49% to $205 million, fueled by an increase in domestic ad-lite subscribers. And content revenue slipped 11% to $107 million because of fewer third-party licensing deals.
“Getting Max right has required patience, discipline and substantial investment,” WBD CEO David Zaslav told analysts. “Those investments are delivering clear results, both in terms of subscriber related revenue growth and bottom line impact.”
WBD is “highly confident” it’s on track to “meaningfully exceed” its target of $1 billion EBITDA in 2025, Zaslav said. He also touted “significant” subscriber growth from the Disney+, Hulu and Max bundle, with “quite high” customer satisfaction.
Max is scheduled to launch in seven markets across Southeast Asia later this month, Australia and over a dozen markets next year, and three of Europe’s biggest markets in 2026. The platform is currently available in 65 markets.
WBD CFO Gunnar Wiedenfels warned that ARPU may trend lower in the near-term, reflecting the growth of Max’s ad-supported offering to over 45 markets. But he said he expects strong subscriber-related revenue and EBITDA growth going forward as Max expands to more international markets over the next 12 to 18 months.
WBD Streaming and Games president JB Perrette said messaging for Max’s password sharing crackdown will begin later in the fourth quarter and will roll out over 2025 and 2026.
In September, Warner secured an early renewal of its carriage deal with Charter Communications, bundling Max and Discovery+ with the latter’s Spectrum TV Select packages.
“Our company struck a deal that’s mutually beneficial, where the consumer wins most of all,” Zaslav said. “We are optimistic this is a sign that these types of agreements will create more stability in our industry.”
Paramount
Paramount Global’s DTC division swung to a profit of $49 million during the third quarter of 2024 — its second quarterly profit in a row for its streaming business, which includes Paramount+ and Pluto — after adding 3.5 million subscribers to reach 72 million.
Subscriber trends benefited from the expansion of an international hard bundle deal, the return of NFL and college football, new originals and theatrical releases and Paramount+’s bundle with Charter’s Spectrum.
Total DTC revenue rose 10% to $1.86 billion, including an 18% increase in advertising revenue to $507 million. It was driven by growth from Paramount+ and Pluto, a 7% increase in subscription revenue to $1.34 billion and a 150% increase in licensing revenue to $10 million.
Paramount+ revenue grew 25% to $1.43 billion, fueled by subscriber growth and an 11% ARPU increase. ARPU was tempered by a price increase last year and a greater-than-expected shift in the mix of its subscriber base toward Essential tier and hard bundle subscribers.
Paramount CFO Naveen Chopra warned DTC would report a fourth quarter loss due to the timing of content spend. Paramount+ remains on track to reach domestic profitability in 2025, he said, with the international side trailing 12 to 18 months behind. Paramount+ subscriber growth is expected to continue in the fourth quarter, driven by its slate of originals and the CBS fall schedule. It does not expect to add new hard bundle partnerships in Q4.
Free ad-supported streaming service Pluto delivered its highest boost in consumption ever of 5% to 5.6 billion viewing hours. Pluto TV, whose majority of consumption comes from its live linear channels, recently rolled out a redesign of the user interface for its video-on-demand library as it capitalizes on growing on-demand content consumption, TheWrap exclusively reported.
Ahead of its scheduled merger with Skydance Media in the first half of 2025, Paramount is cutting 15% of its U.S.-based workforce to generate nearly $500 million in annual cost savings, which will be completed by the end of 2024. Paramount has hired bankers to help with possible asset sales and is also in “active discussions” with other streamers about potential strategic partnerships or joint ventures.
“We are evaluating potential partnerships in streaming through a lens of creating value for the business and our shareholders over the long term,” Co-CEO Brian Robbins said. “Given the complexity, we are being deliberate and thoughtful in our approach and assessment.”
Peacock
Peacock posted a loss of $436 million during the quarter, a 22% improvement over a $565 million loss in the prior-year period.
The streamer’s revenue grew 82% to $1.5 billion, and it added 3 million paid subscribers for a total of 36 million, up 29%. The Olympic games brought in record high revenue of $1.9 billion, with average daily viewership of 31 million across the company’s linear networks and Peacock, an 82% increase compared to the 2021 Summer Olympics.
Comcast president Mike Cavanagh said NBCUniversal is open to streaming partnerships to help grow Peacock.
“As you know, we chose not to participate in the M&A process around Paramount in the earlier part of this year, but we would consider partnerships in streaming despite their complexities,” Cavanagh said during the company’s third quarter earnings call.
The pay TV giant is also spinning off its cable network portfolio into a separate, publicly-traded company that will reach 70 million U.S. households. The move, which is expected to take a year, will not include Peacock, Bravo, the NBC broadcast network, NBC Sports, Telemundo, NBCU’s local stations and the company’s film and television studios. The cable network portfolio generated about $7 billion in revenue for the 12-month period ending Sept. 30.
