Netflix awoke to find its streaming crown stolen by former new kid on the block Disney+ after the House of Mouse reported 221.1 million subscribers in Q3 against Netflix’s 220.7 million.
The news comes as the latest blow to the struggling streaming giant, who reported its first loss in subscribers in a decade this year as competing services carved slices out of the web service pie.
Disney+ recorded 14.4 million new customers in the quarter, smashing analyst expectations as the company tore ahead of its competition.
It should be noted that the figures from Disney+ include its Hulu and ESPN+ operations, alongside its original streaming platform.
However, Netflix has found itself struggling to retain subscribers in recent months, despite lucratively expensive offerings such as Bridgerton, Stranger Things and its latest big project, Neil Gaiman’s The Sandman.
Disney+ has a marked edge on Netflix, due to its ownership of massive franchises including Star Wars and the Marvel Cinematic Universe, with the service offering exclusive access to shows linked to the respective universes.
Despite its strong results, Disney announced a plan to launch an ad-funded version of the streaming service at the current price plan of $7.99, while ad-free content will cost customers $10.99.
The ad-supported edition of the platform is scheduled to launch outside the US in 2023, however Disney said it didn’t expect the higher price tag to dissuade consumers.
The company confirmed a $1.1 billion loss in the quarter, with management assuring investors its losses were expected to peak in FY 2022.
Meanwhile, Disney revenues grew 26%, driving profits to $1.5 billion year-on-year.
“If you thought life was going badly at Netflix, along comes another blow, with Disney overtaking the streaming rival in terms of subscriber numbers,” said AJ Bell financial analyst Danni Hewson.
“Combined with a recovery in demand for its theme parks post-pandemic, Disney is sitting pretty. However, the high-ticket price for visiting its parks makes it vulnerable to a drop in demand in an economic downturn.”
“And we all know the world of streaming is only as good as the quality of the content, which means consistently spending big bucks to create new shows and films.”
Disney shares rose 8.5% in pre-open trading on Thursday.
