Disney+ has defied fears of a slowdown in the streaming market and overtaken Netflix for the total number of subscribers.
It is the first time a competitor has more paid users than Netflix.
Disney added 14.4m customers to its streaming service Disney+ in the quarter ending on July 2, taking total sign-ups to 221m.
The Marvel and Star Wars producer marked a significant acceleration on the 7.9m who joined in the second quarter. Wall Street analysts had forecast an extra 10m Disney+ subscribers.
It is now just ahead of rival Netflix, which has been losing customers and reported 220.67m total global subscribers.
Disney said it would launch a new ad funded version of its service, competing with a similar offering in the works from rival Netflix, and announced price rises. Disney+ will rise from $7.99 (£6.54) a month to $10.99 a month in December. International price rises were not mentioned.
The entertainment giant posted a 26pc jump in group revenue to $21.5bn in the second quarter, with profits doubling to $2.1bn.
Chief executive Bob Chapek said: “We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership, and significant subscriber growth at our streaming services.”
Shares jumped nearly 6pc in after hours trading.
The results suggest the streaming market has not reached saturation yet even as households cut non-essential expenses amid the cost of living crisis.
Netflix sent a chill through the sector at the start of the year when The Stranger Things broadcaster posted its first drop in subscribers in a decade. It has lost more than 1m customers since the start of the year.
The slump in part reflects increased competition from the likes of Disney but Netflix's downturn fuelled wider fears that the American streamers were becoming victims of the cost of living crisis.
Mr Chapek has set a target of reaching between 230m and 260m Disney+ subscribers by the end of 2024 – or an average of 8.5m per quarter.
He has been attempting to capitalise on the vote of confidence in his leadership from the Disney board despite a string of publicity gaffes since taking over from Bob Iger.
Uncertainty over Mr Chapek's future built after he angered LGBTQ staff and Republican politicians over Disney's handling of a contentious Florida law branded "Don't Say Gay" by its critics.
Disney publicly admonished LGBTQ measures backed by the Republican governor Ron DeSantis, which banned the discussion of sexual orientation or gender identity for children under the age of nine.
Mr DeSantis retaliated by stripping Disney World – the company's Florida theme park – of its special tax status.
The political upheaval dialled up the pressure on Mr Chapek, 61, who had already been criticised for his handling of a public legal spat between the company and Hollywood star Scarlett Johansson.
The Avengers actress had accused Disney of breaching her contract by releasing Black Widow on Disney+ while the superhero movie was still in the cinemas. The dispute was eventually settled.
Despite the missteps, Disney ended speculation over his contract in June when they handed him a three-year deal and described him the "right leader at the right time".