It’s been a whirlwind year for changes at The Walt Disney Company.
©Disney
Bob Iger is back as CEO, park passes got an update, Genie+ changes are on the way, and a few executive shakeups have hit the House of Mouse. And now, with Disney+ being a “number one priority” for Iger, we have an update on just how that division of the Company is doing.
On August 9th, The Walt Disney Company released its earnings report for the third quarter of fiscal year 2023 (Q3 of FY 2023) and we gained some insight as to how various aspects of the Company are performing — including Iger’s top priority: improving streaming and Disney+.
In the report, we learned that the total number of Disney+ subscribers is now 146.1 million. This statistic represents the number of Domestic, International, and Hotstar subscribers combined.
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In comparison, the last earnings report (from May 2023) showed 157.8 million subscribers, which was a decrease from the prior report as well. That means that, between last quarter and this one, Disney+ lost 11.7 million subscribers. Note that most of those losses happened at HotStar. If you look at just Disney+ domestic subscribers, that number decreased by about 0.3 million compared to the prior quarter. Internationally, Disney+ subscribers actually grew by about 1.1 million.
©Disney
Taken altogether (including HotStar), it looks like Iger’s “number one priority” isn’t going great. However, when you look at Disney+ on its own, the numbers aren’t so bad. Also keep in mind that subscriber numbers are only one measure of success when it comes to Disney+.
Disney reported that “Direct-to-Consumer revenues for the quarter increased 9% to $5.5 billion.” They noted that this improvement was “due to higher subscription revenue and a decrease in marketing costs, partially offset by higher programming and production costs and lower advertising revenue.”
Although Disney lost subscribers on its streaming services, the average monthly revenue per paid subscriber “increased from $7.14 to $7.31 due to higher per-subscriber advertising revenue.”
Bob Iger also noted that around 40% of Disney+ subscribers are choosing the ad-supported option. He emphasized that Disney is trying to “migrate more subs to the ad-supported tier” because of the profit potential from advertising. Iger said, “We believe in the future of advertising on our streaming platforms.”
There’s even a Disney+ Day in Disney World!
One analyst asked Bob Iger why Disney+ wasn’t showing the same kinds of numbers as other streaming platforms, like Netflix. Iger said, “Our streaming business is actually very young.” He noted that Disney would “love to have the margins Netflix has,” but because they’re “new at all of this” (meaning streaming), the company hasn’t achieved the kind of balance they know they need to when it comes to spending vs. profits.
Iger said, “We’ve done a tremendous job in a very very short period of time of achieving the cost reductions.” He notes that the company is “reasonably optimistic and hopeful that we will be improving our margins.”
Disney’s earnings report shows that the operating losses from the third quarter for their Direct-to-Consumer platforms (including Disney+) have improved by around $550 million compared to the prior quarter. They attribute this success to “improved results at Disney+, higher operating income at Hulu, and a lower loss at ESPN+.”
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So overall subscriber numbers went down, but several other factors helped to offset that loss. Disney stated that the average monthly revenue per paid subscriber is up for domestic, international, and Disney+ Core as a whole.
©Disney
We’ll be keeping up with more news from The Walt Disney Company, so be sure to stay tuned to DFB for more.
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If I were Igor, I’d be very cautious about following Netflix’s lead on the PW sharing deal. I have a kid in college in another state, and I’m not paying any extra for her to use my account… the same account she’s been using from her room in my house for years. The first time I am negatively impacted by this, I will end my subscription. Same goes for Netflix. Let’s hope Disney gets this right, for their sake.
His #1 priority should be getting Disney back to Disney. All this other garbage is just that garbage I had high hopes for Iger but same ole same ole.
How about focus on the parks, magic key holders and anyone wanting to visit Disneyland and California Adventure still have to make reservations, how about getting rid of reservations
Removing physical products for streaming in Australia won’t help the numbers like thinks it will.
Iger’s priority should be getting Disney back to Disney the way Walt intended it to be and stay away from the evil!! Make Disney Magical Again!
What an idiot. Dumped my Disney stock a while back because the company and its leadership have no vision.
Subscriber numbers are down but revenue is up. Of course it is, they had a big price increase. I canceled my Disney+ subscription a few months ago when the annual price increased by 30%.
Loosing subscribers & money on Disney+? Answer: Increase prices, add additional premium costs and eliminate sharing
Loosing visitors & money at Disney Parks? Answer: Increase prices, reduce services (perks)
Perhaps the answer isn’t in increasing prices! THINK ON THAT
Has the fine over paid execs heard ANY of the concerns/complaints from your consumer base? Can you say “running the business into the ground?”
I never complained about the more expensive vacation that was Disney but now a Disney vacation is tooo expensive and frankly, JUST NOT WOTH THE COST!