Netflix Just Got Beat By Another Streaming Service In Subscriber Numbers
Netflix was once the best streaming service on the planet, however, recent woes have led to another streamer winning in subscriber numbers.
Disney+ has surpassed Netflix as the world’s biggest streaming company. The company added 14.4 million subscribers during the third fiscal quarter, totaling 152.1 million, according to The Hollywood Reporter. The numbers beat Wall Street analysts’ expectations of a 10 million new subscriber average for the period. Its complete user count also includes Hulu’s 46.2 million and ESPN+’s 22.8 million. The House of Mouse now has a direct-to-consumer membership count of 221 million which surpasses its competitor’s 220.7 million as of July 2022.
It is the first time any competitor has passed Netflix on the number of total subscribers. Addressing the news, Disney Chief Executive Bob Chapek said the company simply had a good quarter thanks to their world-class creative and business teams powering outstanding performances across all the company’s properties. This included Disney theme parks, a big increase in live-sports viewership, and significant subscriber growth at several streaming offerings. “We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms,” he said via Yahoo Finance. All of this was reflected in the firm’s strong operating results this quarter.
As an established leader in streaming, Netflix set off a wave of jitters with an unexpected loss of 200,000 subscribers in the first quarter of 2022. The last time the platform experienced a large drop in subscribers was in October 2011. Facing uncertainty, the media giant warned of more trouble ahead, with the company’s share value dropping by more than 25% in hours following the report. When the platform lost 970,000 subscribers the next quarter, it was viewed as a victory although it was the company’s biggest user loss in history. Additionally, Disney stock is up almost 5%, while Netflix fell flat in after-market trading, Deadline reports.
Hoping to stem the loss of subscribers, Netflix plans to introduce an ad-supported subscription tier at a lower cost. Expected to launch early next year in partnership with Microsoft, the once ad-adverse streaming giant emphasized that its current plans will remain free of commercials. Executives are optimistic about the new venture saying that advertising will enable substantial incremental membership through lower prices and profit growth through advertising revenue. The exact pricing for these options is yet to be announced. But the new version is already being tested in several markets.
Meanwhile, Disney’s record-breaking subscriber count comes as the company announced plans to launch a cheaper, ad-supported tier for Disney+ not dissimilar to Netflix. Called Disney+ Basic, the new plan costs $7.99 per month and launches on December 8th in the United States. The current tier without ads, which currently carries the $7.99 monthly price tag, will be rebranded as Disney+ Premium and see its price increase to $10.99. According to CBR, the streamer says viewers in the Disney+ Basic tier can expect about four minutes of ads per hour, which will be broken up into 15- and 30-second spots.
Despite the overall losses, streaming is still winning over linear. Netflix and Disney’s titles remain very popular around the world. All that’s left for every digital platform to do now is convince subscribers that their ad-supported tiers are the best thing for everyone.