Recently, Disney held their Q3 2023 Earnings Call. Here we saw that direct-to-consumer sales have increased 9%. That being said, Disney+ subscribers have dropped to 146.1 million. Disney’s goal for Disney+ subscribers was 154.8 million, so this now falls short. Disney’s
“core” consumers increased by 1% — regardless, we are starting to see subscribers drop off now that Disney has begun to reduce the amount of content they are able to bring to their audience, the people paying for these services on a month-to-month basis.
Credit: What’s On Disney Plus
Disney CEO Bob Iger expressed the following:
Direct-to-Consumer revenues for the quarter increased 9% to $5.5 billion and operating loss decreased to $0.5 billion from a loss of $1.1 billion. The decrease in operating loss was due to a lower loss at Disney+, higher operating income at Hulu and a lower loss at ESPN+. 4 The improvement at Disney+ was due to higher subscription revenue and a decrease in marketing costs, partially offset by higher programming and production costs and lower advertising revenue. Higher subscription revenue was attributable to Disney+ Core subscriber growth and increases in Disney+ Core retail pricing. The increase in programming and production costs was due to higher costs for non-sports content, partially offset by a decrease in sports programming costs. The decreases in sports programming costs and advertising revenue reflected the comparison to IPL cricket programming in the prior-year quarter, as we did not renew the digital rights beginning with the 2023 season.
Iger continued to discuss how they have raised prices across Disney+ prices and that ad-supported Disney+ subscription service options have been purchased by 40% of users. Ad-free bundles will also be coming to the US for Disney+ and Hulu, which will in turn, cost more as their current ad-free options do, increasing Disney+ revenue. Iger also announced that they’ll be cracking down on password sharing, making it impossible to split the cost of Disney+ with friends or family.
Credit: Disney
Prior to the announcement of price increases, Disney also removed a lot of their fan-favorite content from the Disney+ streaming app, instead of adding to it. In less than a year, Disney+ will be increasing the monthly cost of its ad-free plan $3 to $13.99 in October. Hulu, which Disney owns a majority stake in, will also increase the monthly cost of its ad-free subscription $3 to $17.99.
Disney+ reportedly lost a total of four million subscribers in Q2 of 2023. This does not bode well for Disney, especially when considering this downward trend that started back in its Q1 earnings report. The streaming platform’s huge loss was partially down to the streamer’s Disney+ Hotstar offering in India and Southeast Asia losing the Indian Premier League (IPL) rights for the massive cricket nation.
Previous Disney CFO Christine McCarthy outlined the company’s plan, saying, “We are in the process of reviewing the content on our DTC services to align with the strategic changes in our approach to content curation.” The comments come as Disney recently canceled projects like National Treasure and Lucasfilm’s Willow after just one season each.
Credit: Disney
“As a result, we will be removing certain content from our streaming platforms and currently expect to take an impairment charge of approximately $1.5 to $1.8 billion,” McCarthy said. “The charge, which will not be recorded in our segment results, will primarily be recognized in the third quarter as we complete our review and remove the content.”
Therefore, Disney+ is currently in the midst of a historic content purge, which has garnered the attention of fans from around the world. Disney removed more than 50 titles from both Disney+ and Hulu, including dozens of full-length films and series, in an attempt to cut costs. Now, having made it to Q3, we can see that this content disposal campaign has not helped their Disney+ numbers.
CNN commented on the demise of the streaming platform saying “The more than 20% hike in prices means Disney+ will now cost twice the original price when the service debuted four years ago, and Hulu’s ad-free tier is now more expensive than the most popular Netflix plan”
Now, it seems that Disney+ is joining Paramount, Warner Bros. Discovery, NBCU and even Netflix who have all raised prices this year in a drive toward profitability.
CNN continued, “The announcement puts to an end much of the initial allure that led to the popularity of streaming. When Netflix first offered its pioneering service for only $8 a month, millions of people signed up, eager to have access to the company’s expansive catalog for just a fraction of the cost of the traditional cable bundle. That served as the genesis of the streaming era, with legacy entertainment companies such as Disney racing to launch their own direct-to-consumer products at unsustainably low costs.
Now that is all over.
Those massive libraries of content are growing more expensive (not to mention shrinking) by the year. In fact, consumers who bundle just a few streamers together in 2023 will find that the final cost is effectively the same as basic cable. Couple that reality with the introduction of ads into streaming and the end product eerily resembles on-demand cable.”
Now, it seems that Disney+ is just another channel on cable TV, that you will have to pay more for to erase the ads — which was the reason people paid for the service in the first place instead of watching cable TV. Prices are rising as content libraries shrink, and subscriber numbers are dwindling. Netflix will then be cheaper than Disney+, and considering Netflix remains the reigning leader of the streaming wars, it may be the one that viewers choose when deciding to cancel certain subscriptions as price hikes continue.
Big Shot (Disney+) Turner & Hooch [(Disney+) The Mysterious Benedict Society (Disney+) The Mighty Ducks: Game Changers (Disney+) Willow (Disney+) The Making Of Willow (Disney+) Diary of a Future President (Disney+) Just Beyond (Disney+) The World According to Jeff Goldblum (Disney+) Marvel’s Project Hero (Disney) Marvel’s MPower (Disney+) Marvel’s Voices Rising: The Music of Wakanda Forever (Disney+) Rosaline (Disney+) Cheaper by the Dozen remake (Disney+) The One and Only Ivan (Disney+) Stargirl (Disney+) Encore! (Disney+) A Spark Story (Disney+) Black Beauty (Disney+) Clouds (Disney+) Weird but True! (Disney+) Timmy Failure (Disney+) Be Our Chef (Disney+) Magic Camp (Disney+) Howard (Disney+) Earth to Ned ( Disney+) Foodtastic (Disney+) Stuntman (Disney+) Disney Fairy Tale Weddings (Disney+) Wolfgang (Disney+) It’s a Dog’s Life with Bill Farmer (Disney+) The Premise (Hulu) Love in the Time of Corona (Hulu) Everything’s Trash (Hulu) Best in Snow (Hulu) Best in Dough (Hulu) Maggie (Hulu) Dollface (Hulu) The Quest (Hulu) The Hot Zone (Nat Geo/Hulu) Y: The Last Man (FX/Hulu) Pistol (FX/Hulu) Little Demon (FX/Hulu)
The price hikes are now causing users to cancel their subscriptions. One Disney+ user said, “It’s too expensive for me. I’m going to start subscription hopping between streaming services, only subbing to a service when it has a show I want to watch. I’ll keep YouTube TV instead of cable.” Others praised Netflix over Disney+ for not removing original content that is not copyrighted. Many are assuming that upcoming contracts will try to lock in users, which will cause a major fall in Disney+ subscribers.
Are you planning to keep your Disney+ subscription?