Disney+ streaming service loses 4m subscribers in first quarter
May 11, 2023 05:56 pm
Disney says its flagship streaming service lost 4m subscribers in the first three months of the year amid a wider cost-cutting drive.
At the same time the Disney+ platform narrowed its losses by $400m (£316.5m).
The home of Mickey Mouse, the Star Wars franchise and Marvel movies is under pressure to make its streaming business profitable as the traditional film and television market shrinks.
Shares in the company fell by around 5% in after-hours trading in New York.
Most of the subscriber losses came from its Hotstar service in Asia, which lost streaming rights to Indian cricket matches last year. Disney+ also lost around 300,000 customers in the US and Canada after raising subscription prices.
It comes as Disney’s streaming business reduced its operating losses to $659m for the first three months of this year. That was down from $1.1bn in the previous quarter.
Disney chief executive Bob Iger said the improved financial performance reflects “the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success.”
He previously said Disney+ had reached a “turning point” and would become profitable by next year.
Earlier this year, the entertainment giant reported its first fall in subscriber numbers and announced plans to cut 7,000 jobs.
The latest announcement comes after thousands of Hollywood TV and movie screenwriters held their first strike in 15 years last week.
They are calling for better pay and working conditions as the transition to streaming has upended the traditional television and film industry.
The last writers’ strike was in 2007. It lasted 100 days and cost the industry an estimated $2bn.
On Wednesday, Disney’s chief financial officer Christine McCarthy declined to put a figure on how much the latest strike could cost the company.
The walkout has already shut down several Disney projects, including those set to run on Disney+.
Disney has poured billions of dollars into its streaming platforms in recent years, transforming it from a company rooted in traditional television, movies and theme parks into one of the streaming industry’s major players.
It now has a total of more than 231 million subscriptions across its three streaming platforms, which also include the sports-focused ESPN+ and wider entertainment site Hulu.
Disney+ has close to 158m subscribers around the world, although that is still behind rival Netflix’s 232.5m subscribers.
Source - BBC