In the first three months of 2023, Disney+ experienced a drop in subscribers, my dear friends. Can you believe it? They lost a staggering 4 million subscribers, marking their second consecutive quarterly decline.
Despite the subscriber setback, Disney managed to narrow its losses in the streaming business. They reduced the losses by a whopping $400 million, which is a 26% decrease compared to the previous year.
However, Disney’s theme parks came to the company’s rescue. During the January-March period, the company’s theme parks delivered an impressive performance, helping Disney surpass Wall Street’s estimates for quarterly earnings and revenue.
However, it hasn’t been all good news for Disney during this fiscal Q2. They faced their fair share of challenges, including company-wide layoffs, a writer’s strike that has now become active, and a turf war with Florida Governor Rick DeSantis.
Disney+ concluded the quarter with 157.8 million subscribers, falling short of Wall Street’s estimate of 163.17 million subscribers. Last quarter, Disney+ had already seen a decline to 161.8 million subs, and this time around, the drop was mainly driven by a sequential decline of 4.6 million subscribers at Disney+ Hotstar, the service offered in India and parts of Southeast Asia. Disney+ lost about 300,000 subscribers in the U.S./Canada, reaching a total of 46.3 million subscribers.
Now, let’s talk about Disney’s streaming siblings, Hulu and ESPN+. Hulu gained 200,000 subscribers during the quarter, reaching a total of 48.2 million subscribers. As for ESPN+, it saw an increase of 400,000 subscribers, bringing the total to 25.3 million.
CEO Bob Iger shared that Hulu content will be integrated into the Disney+ platform, creating a “one-app experience.” CFO Christine McCarthy also revealed that Disney is reviewing the content on their streaming platforms and will be removing certain content to align with strategic changes in content curation. This move is expected to result in a writedown of $1.5-$1.8 billion in the next quarter.
