Disney+ sustains major damage, loses 4 million subscribers in the first quarter
As Disney is getting nearer to its third round of expected job cuts, and is simultaneously dealing with production delays owing to an ongoing writers strike, the company has delivered more bad news to its investors.
Its flagship streaming business and home of Mickey Mouse, Marvel movies, and the Star Wars franchise – Disney+ – lost four million subscribers in the first three months of the year, bringing the total to 157.8 million, compared to 161.8 million subscribers in the quarter before.
Analysts had forecasted a subscriber growth of 163.17 million.
While Disney+ lost roughly 300,000 users in Canada and the US after increasing subscription prices, a major portion of the drop came from its Hotstar service in Asia, which couldn’t retain streaming rights for the Indian Premier Cricket League.
Disney+ Hotstar lost around 8% of its subscriber base, dropping to 52.9 million subscribers from 57.5 million in the previous quarter. The streamer reported its first subscriber drop since 2019 in the last quarter, seeing a fall of 2.4 million.
CEO Bob Iger had mentioned during the last earnings call that Disney will be going through a significant restructuring, including layoffs – expected to impact 7,000 employees. While the company has already had two waves of job cuts, the third round might come soon.
Iger had previously announced the firm’s plans to save $5.5 billion in expenses, including $3 billion in content spending. Disney also confirmed that it wants to put greater emphasis on the Star Wars and Marvel franchises over others.
But it recently halted productions for ‘Star Wars: Andor’ and Marvel’s ‘Blade’ as a result of the Writers Guild of America (WGA) strike, which kicked off last week after the group and the Alliance of Motion Picture and Television Producers couldn’t reach an agreement.
The writers are demanding higher compensation as jobs are less consistent for them in the streaming age since shows typically have a lesser number of seasons, compared to shows on cable.
Consequently, if less content gets released on the platform because of the strikes, more and more users would potentially prefer to cancel their subscriptions.
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Nonetheless, despite the ‘bad news’ concerning job cuts and a drop in subscribers, Disney seems to be seeing improved financial performance for its streaming business. While losses were reduced from $1.1 billion to $659 million in the span of a quarter, revenue also rose to $5.5 billion in the division.
Meanwhile, Hulu saw a jump in subscribers, rising to 43.7 million from 43.5 million subs in the previous quarter. ESPN+ also added 400,000 subscribers, increasing its total to 25.3 million.
