Walt Disney Co. reported a smaller-than-expected increase in subscribers to its namesake streaming service, a sign that Disney+ is struggling to broaden its appeal after an explosive start.
The video service gained 2.1 million customers in the fiscal fourth quarter, Burbank, California-based Disney said Wednesday, bringing the total to 118.1 million globally. Analysts were forecasting 119.6 million, the average of estimates compiled by Bloomberg.
The miss was part of a broadly disappointing quarter for the entertainment giant, which also saw profit decline at its film and TV businesses.
Disney has made the family streaming service its major focus for growth in the coming years, and looks to reach as many as 260 million customers by 2024. The company is celebrating the second anniversary of the $8-a-month Disney+ on Nov. 12 by offering new movies and promotions across the Disney empire.
Disney reported fourth-quarter earnings of 37 cents a share, excluding some items, missing analysts’ projections of 49 cents. Sales in the period ended Oct. 2 rose to $18.5 billion, trailing estimates of $18.8 billion.
Shares of Disney fell as much as 4.3% to $167 in extended trading after the announcement. They had declined 3.7% this year through Wednesday’s close in New York.
Chief Executive Officer Bob Chapek said in September that investors should expect Disney+ subscribers to “increase by low single-digit millions” from the previous quarter. While analysts reduced their estimates, they still expected the service to add 4.9 million customers.