Disney Streaming Service Sees Subscribers Fall Again
Disney reported a loss for the most recent quarter, with the number of subscribers to its streaming service shrinking again. The falling Disney+ subscriber numbers – for the third consecutive quarter – came as a major writers and actors strike hits the U.S. entertainment industry, threatening the company’s ability to produce content key to the streaming service’s appeal.
Writers and Actors Strike
Hollywood television and movie writers went on strike in May, followed by actors in mid-July. The last time Hollywood writers went on strike in 2007, it lasted 100 days and cost the entertainment economy around $2 billion. This time, the two sides are clashing over higher pay, stable employment, and a greater share of profits from streaming. The current double blow of actors and writers is the first since the 1960s.
Password Sharing a ‘Priority’
Disney+ finished the quarter with 146.1 million subscribers, compared to just shy of 158 million in the first three months of this year. The company plans to crack down on password sharing, which CEO Bob Iger called a ‘significant’ issue. Disney announced it will raise its streaming service subscription price in the United States to $14 monthly starting October 12, an increase of $3.
Challenges and Growth Opportunities
Third Bridge analyst Jamie Lumley believes Disney+ has ‘a long road ahead’ to becoming profitable. The company faces challenges such as the ongoing strike, weak reception of its content, and increased competition in the streaming media market. However, Disney sees price increases and advertising as growth opportunities. The company plans to raise the price on its ad-free tier and expand advertising on Disney+. It also aims to create a ‘one app’ offering for Disney+ and Hulu by the end of the year.
Theme Parks and Cruise Business Rebound
While the streaming service faces challenges, Disney’s theme parks and cruise business continue to rebound from the pandemic. Revenues in the streaming division rose to $5.5 billion, and total Disney revenues in the quarter were $21.8 billion. The company’s focus on streaming, film studios, and theme parks will drive its growth in the coming years.
Despite the decline in streaming service subscribers, Disney remains optimistic about its future. The company is taking steps to address the challenges it faces and capitalize on growth opportunities. With its strong brand and diverse content offerings, Disney is well-positioned to navigate the evolving streaming landscape and continue to attract subscribers.