Disney Caught ‘Padding’ Disney+ Numbers With Free Subs

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Disney’s recent financial results revealed that Disney+ is growing faster than predicted, though this growth is largely due to partnerships where Disney+ is bundled with other services, rather than people subscribing directly.

As a big Disney+ watcher, I found it really interesting to hear from their CFO, Hugh Johnston, on CNBC. He mentioned that roughly half of the new subscribers they gained this quarter came through deals with other companies, and the agreement with Charter Communications was a huge driver of that growth. It’s good to see they’re finding ways to expand their audience beyond just direct sign-ups.

Charter Customers Are Counted As Paid Subscribers

With the new agreement, Spectrum TV Select customers get Disney+ Basic included for free – there’s no extra charge for Charter customers.

As a big movie fan, I was pretty surprised to learn how Disney+ counts its subscribers. Apparently, millions of people ended up with access to Disney+ through their cable packages, even if they didn’t specifically sign up for it! Charter, my cable provider, pays Disney a flat fee to include Disney+ for all of us, and Disney counts those people as subscribers. It’s a bit weird because we, the customers, aren’t paying anything extra for it, but Disney still includes us in their numbers.

Lower Revenue Per User Shows the Impact

Getting people to subscribe to headlines increases our audience size, but it doesn’t bring in as much money as when people sign up directly.

Disney counts customers who get Disney+ through another company (like a mobile provider) as regular subscribers as long as Disney still gets paid. This is why the average revenue per user in the US remained at $8.09, and why revenue from international users only increased a little.

Subscriber totals rose, but the financial upside was limited.

Wall Street Saw Through the Headline Numbers

Disney is teaming up with various partners to demonstrate its size and reach as growth in the streaming market begins to level off.

It helps Disney replace the subscribers who cancel so the total number doesn’t drop.

However, investors were really looking at the bigger picture: Disney+ needs more subscribers willing to pay for premium features or services to significantly increase profits.

After the company announced its earnings, the stock price fell almost 10% because investors were concerned about lower profits in the entertainment sector, reduced cash flow, and increasing expenses related to content creation, sports broadcasting rights, and ongoing projects.

The Subscriber Strategy Doesn’t Fix the Fundamentals

Disney will probably keep using strategies like bundling and selling content wholesale as it prepares for the future of streaming, particularly with the upcoming launch of ESPN’s own streaming service.

This latest financial report highlights a key point: not all Disney+ subscribers are the same. While bulk subscription deals can increase subscriber counts, they don’t address the fundamental financial issues the service is facing.

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2025-11-13 20:31