Disney’s struggling streaming service has lost millions more customers following a recent price hike, the company revealed this week.
Variety reported that in its first quarter earnings call, Disney executives confirmed that they had lost around 1.3 million subscribers after implementing a significant price hike last October. Total subscriber numbers fell from 112.6 million to 111.3 million.
Hugh Johnston, Disney’s chief financial officer, said:
Disney+ core subscribers decreased sequentially by 1.3 million, in line with prior guidance. While subscriber growth will vary from quarter to quarter, we are confident in our prospects for ongoing sub growth over the longer term.
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However, the company celebrated that it had cut its losses on the streaming service by $300 million. It is also making the bold projection that Disney will add six million subscribers in the current quarter, which runs until the end of March.
Despite the decline in subscribers, Disney reported relatively strong earnings for the last three months of 2023, surpassing expectations. This performance was driven by significant cost-cutting measures, including thousands of job cuts.
Quarterly revenue reached $23.55 billion, showing growth from $21.24 billion in the previous quarter and slightly exceeding the $23.51 billion reported in the corresponding quarter of the previous year. Its profits amounted to $1.91 billion, marking a 49 percent increase compared to $1.28 billion in the same period the year before.
CEO Bob Iger insisted that the company has turned in a “strong performance” over the past year:
Just one year ago, we outlined an ambitious plan to return The Walt Disney Company to a period of sustained growth and shareholder value creation. Our strong performance this past quarter demonstrates we have turned the corner and entered a new era for our company, focused on fortifying ESPN for the future, building streaming into a profitable growth business, reinvigorating our film studios, and turbocharging growth in our parks and experiences.
As we build for the future, the steps we are taking today lend themselves to solidifying Disney’s place as the preeminent creator of global content. Looking at the renewed strength of all of our businesses this quarter – from Sports, to Entertainment, to Experiences – we believe the stage is now set for significant growth and success, including ample opportunity to increase shareholder returns as our earnings and free cash flow continue to grow.
However, it is certainly not all good news for Disney. Last November, even CNN admitted that they are facing a multitude of challenges ranging from questions over long-term leadership to changing consumer tastes.
Meanwhile, the company recently lost its last-ditch attempt to sue Florida Governor Ron DeSantis over his decision to remove its self-governing status at its park in Orlando following a bitter dispute over the company’s left-wing political advocacy.
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The federal court’s decision made it clear that Governor DeSantis was correct: Disney is still just one of many corporations in the state, and they do not have a right to their own special government,” a DeSantis spokesperson said at the time. “In short – as long predicted, case dismissed.”