Disney’s recent tumble in streaming subscribers for Disney+ continued according to fiscal third quarter earnings released Wednesday—in fact, they got much worse. But the restructuring under CEO Bob Iger in the eight months since he returned to his old job also led to some upsides, with streaming losses and overall company losses narrowing, thanks in part to austere job reductions over the past few months.
On a conference call with analysts, Iger identified three growth areas for the future—film studios, parks and streaming—and noted the synergy between them that shows promise for the future, such as excitement over the theatrical release of the third Guardians of the Galaxy film also sparking higher engagement with the first two films on Disney+.
But as other streamers are also experiencing, streaming can be a money pit with high costs for content and marketing to launch the service. Like Peacock and Paramount
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Subscribers saw a considerable decline. Disney+ subscriptions fell from 157.8 million worldwide to 146.1 million, a loss of 11.7 million. That more than doubled last quarter’s record decline, and it included a decrease of 300,000 in the U.S. and Canada, where subscribers fell to 46 million. It’s just the second time Disney+ has taken a hit in North America; last quarter was the first.
Disney Hotstar Responsible For Most Streaming Losses
The bulk of the subscription loss came in India, where Disney+ Hotstar dropped by 24%, going from 52.9 million to 40.4 million. This drop was expected. Disney lost the rights to a critical cricket league in India, Indian Premier League (IPL), with Viacom18, a joint venture of Viacom and India’s Reliance Industries, picking up those rights for a hefty $2.6 billion.
Since losing IPL rights, Disney+ Hotstar has seen subscriptions plummet as cricket fans cancel, which is hurting its overall numbers—about a third of Disney+ total subscribers had been in India.
If you take Disney+ Hotstar out of the equation, international streaming subscriptions were actually up by 1 million.
Total Hulu and ESPN+ subscribers were about the same from quarter to quarter.
Narrowing Losses For Streaming
Streaming losses continued to narrow after a $400 million decrease in streaming losses last quarter. That helped Disney as a whole also narrow its losses, from $1.41 billion last year to $460 million this quarter.
The narrowed losses for streaming reflected several strategies Iger has enacted. Marketing spend on streaming has decreased—brand awareness is high four years after the service’s launch, so this makes sense. Iger has cut thousands of jobs across Disney, which has also helped narrow losses.
Plus, Disney+ has raised prices in almost 50 countries internationally, making up for some of those subscriber losses.
“We grew this business really fast, before we really understood what our pricing strategy should be or could be,” Iger said.
Iger said Disney+ will expand its ad-supported tier to Canada on Nov. 1.
Disney+ Joining Netflix
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Another concern for Disney+ (and all streaming services) is password sharing, which happens when people give their passwords to friends and family who don’t live in the same household, allowing others access to the content without purchasing a subscription.
Netflix has claimed a vast number of people avoid paying for subscriptions in this way, and it began rolling out international and then domestic ways to fight the problem over the past year. Disney+ now plans to do the same, though Iger declined to give details on the plans.
“It’s significant,” Iger said of the impact of password sharing on Disney+ subscriptions. “We don’t know how much of the password sharing, as we eliminate it, will relate to growth in subscriptions.
He said the company will begin focusing on password sharing crackdown in 2024 and noted executives see it as “a real chance to grow our business.”
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