Disney plans to increase spending on Disney Media and Entertainment Distribution (DMED) programming by more than $1 billion this quarter versus the same period last year.
For the current quarter, the company plans to up its spending on direct-to-consumer programming by between $800 million and $1 billion versus the comparable fiscal 2021 quarter, CFO Christine McCarthy said during Disney’s fiscal Q1 2022 earnings call Wednesday. On the linear network side, content spend is expected to go up by approximately $500 million.
“It’s all about content, content, content,” CEO Bob Chapek said on the earnings call, which followed Disney’s announcement that Disney Plus had reached nearly 130 million subscribers by the end of 2021.
Disney Plus has achieved its goal of premiering one new title each week, Chapek said, and overall wants to double content output. By fiscal year 2023, Disney will evaluate raising the price of Disney Plus once it achieves its target for new content, he told analysts.
“We are bullish about our future content going forward, not only in terms of quality but also in terms of quantity,” Chapek said. “And that’s really what’s driving our bullishness for what we might see as the pricing power that we would have going forward.”
In its annual report last November, the Walt Disney Co. said it planned to increase its overall spending on content to $33 billion for its fiscal year of 2022. On Wednesday, McCarthy said the company is still on track for that overall spend target.
The $33 billion figure marks an uptick of approximately $8 billion over the company’s fiscal 2021 spending of $25 billion. The boost is driven by Disney’s intention to expand its reach on streaming, through platforms like Disney Plus, Hulu and ESPN Plus, rather than through the company’s linear businesses on television and film. The $33 billion total includes content sports rights and other content for ESPN, ESPN Plus and other platforms.
Disney’s fiscal Q1 earnings report marked the first time the company has broken out content spending for each of its streaming services.
Disney Plus programming and production costs were $920 million for the quarter ended Jan. 1, up 79% from the year earlier, according to the 10-Q filing. For the quarter, the operating loss from Disney’s Direct-to-Consumer segment increased 27%, to $593 million, due to higher losses at Disney Plus and to a lesser extent ESPN Plus, partially offset by improved results at Hulu.
Hulu content costs for fiscal Q1 were $1.83 billion, up 13% versus the prior-year period, and spending for “ESPN Plus and other” was $427 million, up 78%.
Todd Spangler contributed to this story.