Is it time for Disney+ to make further adjustments? The streaming platform, launched with fanfare at the end of 2019, lost subscribers for the third consecutive quarter, but the Californian group has promised to turn the corner this summer and improve its profitability.
This is not the only concern of the enchanted Kingdom, faced with a historic strike by screenwriters and actors as well as mediocre receipts in cinemas and on television channels, its traditional channels.
$22.3 billion in revenue
This Wednesday, August 9, Disney published mixed quarterly results for the period from April to June – 22.3 billion dollars in turnover, a small increase over one year but slightly below analysts’ expectations – and announced a price hike for Disney+.
The monthly subscription to the platform, without advertising, will thus increase from 11 to 14 dollars in October in the United States, double the initial price four years ago.
“We had already raised our prices in 2022,” said Bob Iger, the company’s boss, during a conference call on Wednesday. “And we hadn’t seen any significant drop in subscribers, which was heartening.”
The company also plans to tighten the screw in 2024 on the sharing of passwords between users to prevent them from enjoying content for free. This method allowed Netflix to see its number of subscribers jump in the second quarter. The pioneer of the sector has more than 238 million worldwide, compared to 146 million for Disney +.
A fall because of the Indian market
From the end of September to the end of June, the Mickey and Marvel platform lost 18 million subscribers in all, mainly due to the Indian market. Hotstar, the local version of Disney, weighs almost a third of the world total, but it has lost the rights to broadcast the national cricket championship. In North America, the service recorded a slight drop of 1% in the number of subscribers, the second consecutive one.
But this summer, the number of subscribers to Disney +, excluding India, “will rebound in the United States and internationally”, promised Kevin Lansberry, interim chief financial officer.
Bob Iger was also pleased that 3.3 million people have subscribed to the subscription with advertisements since its launch at the end of last year.
In financial terms, the streaming activity remains loss-making, but it continued to reduce its operating losses over the quarter, to 512 million dollars instead of 1 billion last year at the same period.
“It’s encouraging,” commented Paul Verna of Insider Intelligence, “but it’s mainly due to massive layoffs and falling spending on content, rather than real growth.”
Sales of films and programs down
Disney also saw its sales of films and programs to cinemas and television channels decrease by 7% over one year, to $6.7 billion. The business’ operating profit plunged 23% to $1.9 billion.
Only revenue from amusement parks, cruises and related products increased substantially, by 13%, to $8.3 billion.
On Wall Street, Disney shares initially fell in electronic trading after the close of trading on Wednesday, but rose nearly 3% after price hike announcements.