Disney has announced that its flagship streaming service has lost 4 million subscribers in the first three months of this year.
Source: motionarray.com
The decrease in the number of subscribers occurred against the background of a broad reduction in costs. At the same time, following the results of the first three months of this year, the streaming service Disney + reduced losses by $400 million. Currently, the company is under serious pressure in an attempt to make the streaming business profitable in the face of a shrinking traditional film and television market.
During non-business trading in New York, the value of Disney shares decreased by about 5%.
The main reason for the significant decrease in the number of subscribers is the Hotstar service in Asia, which in 2022 lost the rights to broadcast cricket matches in India.
Also in the USA and Canada, about 300 thousand customers decided to unsubscribe due to an increase in its cost.
Disney’s streaming business reduced operating losses to $659 million in the first three months of this year. In the previous quarter, this figure was equal to $ 1.1 billion.
Disney CEO Bob Iger says that improved financial performance is the result of strategic changes that are aimed at transforming the business in order to ensure further sustainable growth and success. In the fall of 2022, he stated that the company’s history was at a turning point and announced that by 2023 the firm would become profitable.
Earlier this year, the company announced the first reduction in the number of subscribers and announced its intention to cut 7 thousand jobs.
Disney’s financial situation is also affected by the strike announced last week by several thousand Hollywood television and film screenwriters, who are calling for higher wages and better working conditions amid the transition to streaming, which has changed the situation in the industry. The previous similar strike occurred 15 years ago and lasted 100 days. For the industry, the result was a loss of approximately $2 billion.
Disney CFO Kristin McCarthy did not announce the figure of potential financial losses of the company in connection with the strike. It is already known that due to the protest of the screenwriters, several Disney projects were closed, including those intended for Disney+.
Over the past few years, the company has spent billions of dollars on the development of its streaming platforms. Disney is in a state of gradual transformation from a company that deals with traditional cinema and television into one of the largest players in the streaming industry.
There are currently more than 231 million subscriptions across the company’s three streaming platforms, which also include sports-focused ESPN+ and entertainment site Hulu. Competing Netflix has 232.5 million subscribers.
As we have reported earlier, Walmart to make ad-supported Paramount+ service available as a perk for members.
