Credit: Inside the MagicDisney+ has never made money for the Mouse, and now, even the company’s top executives admit that its streaming service can’t survive on its own.
The streaming wars have been raging for over a decade now (although there’s no agreed-upon date of commencement), and Netflix has been at the top of the hill pretty much the entire time.
On some level, it seems to have driven all the major studios a little bit crazy that an upstart DVD-by-mail company became the dominant force in streaming content, first launched by early hit shows like Orange is the New Black and House of Cards and now buoyed by Stranger Things and Wednesday.
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Driven by relentless FOMO, everyone from Disney to Paramount to Warner Bros. has launched their own proprietary streaming service. Many of them, like Amazon Prime Video or HBO’s Max, have millions of subscribers but can’t manage to make a profit.
Basically, when the major entertainment media corporations decided to go all-in on streaming, they seemed to have failed to check whether losing revenue from DVD and Blu-Ray sales, commercials ad space, and the box office was at all important to their business model.
Disney+, the namesake streaming service of The Walt Disney Company, might be the most notorious example of this.
Launched in 2019 at an industry-low monthly subscription price, with no ads and the entirety of the Disney catalog of IP, the streaming service immediately hooked millions of subscribers. Since then, the company has lost literally billions of dollars trying to make it a thing.
In 2023, CEO Bob Iger said, “We ended up losing a lot of money on that, more so than we expected initially. Part of that was because we were chasing sub[scriber] growth and not as focused as we needed to be on the bottom line.”
Put even more plainly, Disney was so obsessed with taking subscriber growth from Netflix that it didn’t pay attention to how much money it was spending on its own streaming service.
It turns out not much has changed in a year. In a Q&A session with Bloomberg, Disney Entertainment co-chair (and potential successor to Bob Iger) Dana Walden revealed that the company’s best strategy for getting people to watch Disney+ was actually to get them to watch another streaming service: Hulu.
Related: Report: Disney+ Streaming Completely Stagnant Despite Bob Iger’s Claims
In response to being asked how Disney+ would boost engagement after several losing quarters, Walden said, “Programming and technology, and we’re moving forward on both fronts. Think about Hulu on Disney+. We’re moving in the right direction. We see Disney+ subscribers increasing their engagement because they are watching the Hulu content.”
Disney merged Hulu with Disney+ earlier this year after buying out Comcast’s shares in the company, and it looks like that was yet another big expenditure to keep its streaming service plugging along. At some point, maybe it will start making money.
Do you watch more Disney+ or Hulu shows?