Walt Disney Company is currently hemorrhaging money on its streaming services. The entertainment company’s financial data indicates it is losing more than $1 billion per quarter in this area of the business. Former CEO Bob Iger was recently brought back to lead the company, replacing Bob Chapek, in an attempt to steer Disney toward success.
Breitbart reported on Disney’s financial struggles:
For its first fiscal quarter, Disney’s direct-to-consumer business — which includes Disney+, Hulu, and other services — lost $1.05 billion, a 78 percent larger loss from the same period a year ago. The figure represents a slight sequential improvement from the fourth quarter, which saw a $1.5 billion loss for the unit.
Twitter user Edmund Lee also commented on Disney’s financials stating, “Disney beat investor’s predictions for the quarter (top and bottom lines), but its streaming business lost more than $1 billion. Disney+ et al. grew its sales by 13 percent to $5.3 billion, but it spent $6.3 billion. And @disneyplus lost 2.4 million subscribers.”
Disney beat investor's predictions for the quarter (top and bottom lines), but its streaming business lost more than $1 billion. Disney+ et al. grew its sales by 13 percent to $5.3 billion, but it spent $6.3 billion.
— Edmund Lee (@edmundlee) February 8, 2023
As mentioned, Disney’s subscriber counts on streaming platforms is plummeting, creating a significant driver in the unprofitability. Variety expounded upon this issue, noting that much of these losses are coming from India:
The drop in Disney+ subscribers — which was bigger than analysts expected — was entirely driven by a 3.8 million sequential decline Disney+ Hotstar, the version of the service offered in India and parts of Southeast Asia, to stand at 161.8 million at the end of 2022. Last year, Disney lost streaming rights to Indian Premier League (IPL) cricket matches, which prompted it to lower growth targets for Disney+ Hotstar in India.
In the U.S./Canada, Disney+ gained about 200,000 subs (to reach 46.6 million). Hulu gained 800,000 in the quarter to stand at 48.0 million, and ESPN+ increased by 600,000 to 24.9 million.
While most of the subscriber decline is coming from other parts of the world, Disney has also been dealing with sluggish growth in subscription in the United States. Breitbart pointed out that consumers may be turned off by the incessant woke politics Disney’s content is embracing:
Disney+ has been wrestling with sluggish domestic subscriber growth in recent month as the streamer has increasingly embraced woke identity politics in its entertainment geared toward children.
As Breitbart News reported, the Disney+ series The Proud Family: Louder and Prouder is pushing reparations for slavery, claiming in its latest episode that America was founded on “white supremacy” and “still has not atoned” for its racism.
Additionally, Disney may see struggles with its theme park outside of Orlando, Florida after Ron DeSantis revoked the company’s special tax privilege from its self-governing status. This came after Disney vowed to fight DeSantis’ bill aimed at giving more parental rights in Florida’s education system.
Disney has brought back Bob Iger to cut costs and restructure the company. On a recent earnings call, Iger detailed a cost-cutting initiative that would involve slashing approximately 7,000 jobs and reducing costs by $5.5 billion. Iger also seeks to give more power to content executives and put a greater emphasis on the sports business segment. Iger stated on the earnings call:
“Since I first became CEO in 2005, I have guided the Walt Disney Company through two significant transformations. The first was to confer greater creative control and authority to our creative businesses and to focus on great brands and franchises.”
“…Now, it’s time for another transformation, one that rationalizes our enviable streaming business and puts it on a path to sustained growth and profitability while also reducing expenses to improve margins and returns and better positioning us to weather future disruption, increased competition, and global economic challenges.”
“We must also return creativity to the center of the company, increase accountability, improve results, and ensure the quality of our content and experiences.”
"*" indicates required fields