Disney+ reports its first subscriber loss, drops 2.4 million subscribers
Reading Time: 2 minutesDisney’s first quarter with CEO Bob Iger back in command isn’t looking so good. Disney announced its Q1 2023 earnings today, reporting a total of 161.8 million Disney+ global subscribers, a decrease of 2.4 million subs from 164.2 million in the previous quarter. This is the streamer’s first-ever subscriber loss since launching in 2019.
The drop in Disney+ subscribers was mainly driven by a decrease in Disney+ Hotstar subscribers. The international streaming service, available in India and parts of Southeast Asia, saw a decline of 3.8 million subscribers, down from 61.3 million subs in the previous quarter. On the semi-positive side, Disney+ gained 200,000 domestic subscribers in the U.S. and Canada.
The results put Disney+’s 2024 target into question. Disney+ plans to reach 215-245 million subs by 2024, which could see streaming king Netflix, with over 230 million global subscribers, lose its crown. However, it’s looking like Netflix can relax–at least for now.
The loss comes on the heels of the company increasing the subscription price of its Disney+ ad-free plan to $11 per month in tandem with its new $7.99 ad-supported tier. For that reason, analysts were actually expecting a larger loss of 3 million subs, so today’s news is not entirely bad from that perspective.
Disney’s other streaming services, Hulu and ESPN+, had a decent quarter, gaining 800,000 subscribers and 600,000 subscribers, respectively. Hulu now has 48 million subscribers, and ESPN+ has 24.9 million.
Disney also reported an increase in revenue for the quarter, citing $23.51 billion, just barely beating expectations of $23.33 billion. Last quarter, Disney reported $20.15 billion in revenue. In addition, its operating loss among the direct-to-consumer segment narrowed, losing $1.1 billion versus $1.5 billion in Q4 2022.
There have been rumblings in the media that Disney may be exploring the sale of licensing rights for its films and TV series to its competitors in a desperate attempt to combat streaming losses. If the rumor turns out to be true, this would be a significant change in strategy since Disney is known to keep much of its original programming exclusively on Disney+ and Hulu.
Warner Bros. Discovery (WBD) was the most recent major media company to license its shows in order to gain revenue. WBD struck deals with Roku and Tubi to license 2,000 hours of movies and TV shows, including ‘Westworld,’ which was pulled from HBO Max in December.
Additionally, there’s been talk of restructuring, which may result in layoffs. The company froze new hiring in November. Iger has no immediate plans to remove the hiring freeze.
Reference: https://techcrunch.com/2023/02/08/disney-q1-2023-earnings/
Ref: techcrunch
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