It may surprise some—given the company’s standing and value; to others, it’s a predictable development. But no matter your perspective, everyone can agree things aren’t going well for Disney+ and the House of Mouse generally: the streaming platform weathered a decline of 1.3 million subscribers during the final quarter of 2023.
Price Increase To Blame?
Analysts blame the downturn on a significant price increase implemented last fall, a challenging period for the streaming service. These losses notwithstanding, the company managed to narrow its streaming business losses by $300 million in October-December.
The House of Mouse now claims 111.3 million subscribers to its streaming platform, down from 112.6 million in the prior quarter. Disney+’s Core subscribers reside in the U.S., Canada, and international markets (excluding the India-based Hotstar version of the streaming service).
Not All Doom And Gloom
Predictably, this setback contrasts with the company’s ambitious (perhaps delusional?) projection of adding five and a half to six million subscribers to its Core demographic by the end of the current quarter, spanning from January to March.
However, Mickey Mouse’s parent company is not all doom and gloom. Its Indian-based Hotstar arm experienced a significant growth spurt: 700,000 subscribers during Q4 of 2023, or an uptick to 38.3 million from 37.6 million.
Lots Of Losses For Bob Iger
But zoom out, and this improvement looks less like good news for Disney. Indeed, the numerical boost in India amounts to a recovery from a previous loss of 12.5 million subscribers.
Bob Iger and the company had to wave goodbye to this enormous block of subscribers due to strategic shifts, alongside the loss of crucial sports broadcasting rights in the region.
Hulu Had A Better Quarter
All this bad news aside, the globally beloved entertainment brand nonetheless services a staggering 149.6 million streaming subscribers as of the end of 2023: that’s a lot of people.
Still, if you’re the glass-half-empty type, there’s no getting around the fact that it all still amounts a decrease from 150.2 million in the previous quarter.
At the same time, Hulu, another streaming service under Disney’s umbrella, had a better quarter, seeing an increase in subscribers: 45.1 million for streaming-only subscriptions while maintaining 4.6 million for its Live TV + SVOD service.
Perhaps due to Hulu’s success, its parent company began integrating Hulu content into its platform–launching a now well-known “beta” version in early December. Expect an even more integrated version by March 2024.
The integration is part of Disney’s broader strategy to streamline its offerings, consolidating its various media arms to bolster its streaming service’s overall appeal.
Disney Reports Savings
And as any savvy business executive will tell you, when you’re losing revenue, simply cut costs; money saved is money earned.
Thus, shareholders might be happy to know that the House of Mouse financially reported $500 million in cost savings for the quarter. These savings position the company to meet or exceed its $7.5 billion annualized savings target by the end of fiscal 2024.
Additionally, Disney demonstrated a healthy free cash flow of $886 million for the quarter, which should encourage shareholders to breathe easily. And shareholders, at the end of the day, are all Bob Iger cares about.