Disney Plus has been wildly successful since launching in March 2020 — but has now started to pull off its subscriber-laden wagon.
during which First Quarter 2023 Earnings Report (opens in a new tab), Disney confirmed that Disney Plus lost subscribers for the first time in its history. From October to December 2022, the global user base of the streaming platform decreased by 2.4 million.
What is the main reason for the decrease in users? Disney Plus Hotstar, the streaming version available in India and Southeast Asia. Between October 2022 and January 2023, approximately 3.8 million customers canceled their subscriptions.
Fortunately for Disney, the impact of this huge hit has been somewhat minimized thanks to increased subscribers elsewhere. In North America, Disney added 200,000 new customers to its subscriber base, while in non-North American regions (excluding India and Southeast Asia), its subscriber base increased by 1.2 million.
Overall, Disney Plus’ total subscriber base now stands at 161.8 million, down from 164.2 million in October 2022. With Netflix adding 7.66 million new subscribers in the fourth quarter of 2022 — bringing its total to more than 231 million — Disney will see its subscribers decline as its bid to become the world’s best streaming service suffers a major setback .
double trouble in the mouse house
Not surprisingly, Disney’s response to its dwindling Disney Plus subscriber base was an attempt to save face. Or, rather, cash.
To that end, Borg Iger, who recently returned as Disney CEO, announced plans to cut costs by $5.5 billion across the company. Despite Disney’s 8% year-over-year revenue growth, the entertainment giant’s net income will be $23.5 billion in 2022; although its margin improvement is largely due to Disney’s series of theme parks, which are in line with the A total of 27% growth compared to 2021.
However, revenue from Disney’s direct-to-consumer segment — namely Disney Plus, Hulu and ESPN Plus — rose 13% to $5.3 billion. That’s despite the three streaming companies’ operating costs rising from $500 million in 2021 to $1.1 billion last year. With Hulu and ESPN Plus also adding new subscribers to their current fan bases — 800,000 and 600,000, respectively — Disney may be taking a money-saving move.
Iger also confirmed that Disney’s cost-cutting measures will result in a significant reduction in its workforce.According to the company’s First Quarter 2023 Earnings Conference Call (opens in a new tab)Iger revealed that Disney will lay off “approximately 7,000 people” across all divisions, adding: “I did not take this decision lightly. I have great respect and appreciation for the talent and dedication of our employees around the world, and I take note of these changes. impact on the individual.”
It was not immediately clear which departments would lose the most jobs. Iger suggested that Disney would refocus on “our core brands and franchises, which have consistently delivered higher returns.” That likely means most employees at Marvel, Lucasfilm (which develops the Star Wars franchise) and Pixar will be safe, even though layoffs are expected at those studios. Other subsidiaries and divisions may not be so lucky, though.
Analysis: Calculating Costs
There are several reasons for Disney Plus’s sharp decline in fortunes.
First, its content library. Disney has been known to rely heavily on Marvel and Star Wars content to a) lure homeless people in theater seats and b) get people to sign up for its main streaming platform.
However, those franchises have been notable for their absence from Disney+ in recent months. The last Marvel TV show to air on the service – She-Hulk: Lawyer – ends in mid-October.While there have been Marvel Cinematic Universe (MCU) TV specials since then, namely werewolf night and Guardians of the Galaxy Holiday Specialneither production is the long-form content Disney Plus needs to keep viewers engaged.
The same goes for Star Wars. Star Wars: Rogue One prequel series andorra Arguably the best Star Wars show ever, its season 1 finale aired on November 23. Furthermore, despite critical acclaim, andorraAudience demand lags mandalorian and Obi-Wan Kenobithis is not the nirvana that Disney expected.
To be fair, Disney Plus is currently streaming a Star Wars TV series — bad batch season 2. like andorraHowever, it’s not like mandalorianwhich means the streamer’s more casual viewers are less likely to tune in.
That’s the broader problem facing Disney Plus. Yes, some of the best Disney Plus shows have joined the platform in the past few months — Extraordinary, willowand Infinity and Chris Hemsworth Name three. However, these programs are not subscriber drivers, or even subscriber retainers, and Disney needs them. If people don’t believe they’re getting their money’s worth, they’re more likely to unsubscribe.
There’s also the issue that Disney Plus doesn’t really cater to Indian or Southeast Asian audiences. Disney has started producing non-English originals for its streaming service, but the vast majority are still based in Europe. Netflix, by contrast, plans to solidify itself as the streamer of choice in this part of the world — with titles in India and Thailand already in its library, with more on the way — while Disney will soon Long time to catch up here if not act soon.
Finally, the ongoing cost of living crisis means consumers are becoming more cautious about how they spend their money.Last year in the UK, 2 million people canceled their streaming subscriptions, including Netflix, Prime Video and Disney Plus (according to protector (opens in a new tab)). Streaming subscriptions are down across the board as people tighten their purse strings.
Still, there is hope for a revival in Disney Plus’ fortunes.The streaming giant is getting some big names, such as The Mandalorian Season 3 and rocky season 2, 2023. at the same time, Black Panther: Wakanda Forever The service recently launched and quickly became the most viewed Disney Plus movie of all time.
Last year, Netflix showed like Stranger Things Season 4 and Wednesday, which could help the popular streamer recover from subscriber churn. Disney hopes its 2023 lineup will provide a similar boost to its main streaming service.
The arrival of an ad-supported tier outside the U.S. may also help. Disney Plus Basic launches in North America in December 2022, and its $7.99-per-month price point is seen as a key selling point for new signups. Given that Disney Plus Basic is $3 less than streaming’s cheapest non-advertised tier, Disney hopes it will appeal to customers on a budget. And, if it rolls out Disney Plus Basic in non-U.S. territories soon, it could entice people to sign up for the first time, or return after previously canceling their subscriptions.
Disney Plus, you’ve got a slight but major hit. Now is the time to prove your mettle.
For more Disney-based coverage, read our guide to the best Disney Plus movies. Plus, learn how to watch the Star Wars movies in order, learn more about Marvel Phase 5, or get the lowdown on watching the Marvel movies in order.
