Disney+ loses 11.7mn subscribers, streaming fee hike and password crackdown awaits

Disney's recent decline in Disney+ streaming subscribers persisted as revealed in the fiscal third quarter financial report released on Wednesday (August 9). In fact, the situation worsened considerably. However, the reorganisation efforts overseen by CEO Bob Iger during the eight months since his return to the position also yielded some positive outcomes. The losses in streaming and overall company performance have lessened, partially attributed to significant job cuts carried out over recent months and a hike in streaming prices.

During a discussion with financial analysts, Iger outlined three key sectors for future expansion: film studios, theme parks, and streaming services, reported Forbes.

He highlighted the potential synergy among these areas that holds significant potential, citing an example of the anticipation generated by the theatrical release of the third Guardians of the Galaxy film, which has subsequently led to increased interest and engagement with the preceding two movies on Disney+.

Iger has acknowledged the formidable obstacles the entertainment giant is currently facing in the short term.

However, amidst these challenges, he has highlighted the company's efforts to curtail expenses and foster creativity. The latest quarterly results have unveiled both triumphs and vulnerabilities within Disney's operations.

In the aftermath of the quarterly announcement, Disney's stock experienced a nearly three per centsurge during after-hours trading, reported Reuters.

Iger attributed this positive momentum to the impressive $1 billion surge in operating income achieved by the streaming business over the past three quarters.

This surge is integral to Disney's ambitious goal of achieving profitability in its streaming endeavours by 2024.

Quality enhancement and overcoming industry hurdles

While celebrating certain triumphs, Iger also candidly acknowledged the imperative of enhancing the quality of Disney's cinematic offerings.

Moreover, he underscored the strategic importance of transforming Disney's premier sports brand, ESPN, into a platform tailored for direct-to-consumer streaming.

The spectreof ongoing writers' and actors' strikes in Hollywood, which have significantly disrupted film and television production, was also addressed.

Iger's commitment to the ongoing transformation of Disney was evident as he shared, "I returned to Disney in November, and I've agreed to stay on longer, because there was more to accomplish before our transformation is complete."

He unequivocally described the present environment as challenging, emphasising the company's unwavering resolve to evolve.

Disney's fiscal third quarter profits outperformed Wall Street predictions, buoyed by the company's efforts to trim costs.

Disney is on track to exceed its earlier commitment of cutting costs by over $5.5 billion, a promise made to investors back in February.

Despite this positive aspect, the company fell short of revenue expectations for the quarter and slightly missed the mark in terms of projected US Disney+ subscribers.

Also watch |Disney hikes streaming prices

Strategic pricing adjustments and expansion

In a bid to lure and retain subscribers in an increasingly competitive streaming landscape, Disney unveiled plans to raise prices for its ad-free tier of Disney+ and the ad-free version of Hulu.

Simultaneously, the company announced its intention to introduce ad-supported streaming options in Europe and Canada. Additionally, a new ad-free package is set to be introduced for USsubscribers.

While Disney's traditional television business faced continued decline, the direct-to-consumer sector reported a 9 per cent rise in revenue. Disney's Parks, Experiences, and Products group recorded a 13 per centincrease in revenue, largely attributed to the rebound of the Shanghai Disney Resort.

(With inputs from agencies)

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