Disney+ Streaming Service Sheds 7.4% of Subscribers in Q3
BY PYMNTS | AUGUST 10, 2023
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Disney+ streaming service subscribers fell in the fiscal third quarter, even as The Walt Disney Co. made plans to raise monthly fees, crack down on password sharing and create a super app for its content.
In its earnings presentation Wednesday (Aug. 9), the company said Disney+ had 146.1 million subscribers globally as of the most recent quarter, which is 7.4% fewer than the 157.8 million it had in the previous quarter.
Disney+ U.S. subscriber levels dipped in the third quarter, to 46 million, losing 300,000 subscribers from the second quarter, according to the supplemental report with the earnings release. Disney-owned Hulu saw a slight increase in its subscription volume in Q3, adding just 100,000 for a total of 48.3 million subscribers. ESPN lost 100,000 subscribers from the previous quarter, ending up with 25.2 million.
In the earnings call with analysts, CEO Bob Iger said Disney plans to create a one-app experience for its streaming service subscribers as well as a crack down on password sharing.
“We see a future where consumers can access even more of the company’s streaming content all in one place, resulting in higher user engagement, lower churn, and greater opportunities for advertisers,” he said. “What we don’t know, of course, is as we work on this, how much of the password sharing, as we basically eliminate it, will contribute to growth in subscribers. Obviously, we believe there will be some, but we’re not speculating. What we are saying, though is that in calendar 2024, we’re going to address this issue.”
Content streaming juggernaut Netflix saw its subscriber base get a boost in May when it launched its program to stop password sharing.
Disney also announced Wednesday that it is expanding its ad-supported tier for Disney+ to select markets in Europe and Canada beginning Nov. 1. In the U.S., Disney will revamp its pricing and offer a new ad-free bundled subscription plan starting Sept. 6 that includes Disney+ Premium and Hulu for $19.99 a month.
Disney+ subscribers will only be exposed to a limited number of ads during programming, with only four minutes of ads per hour. Additionally, there will be no commercials during programming aimed at preschoolers or for those using their own profiles to stream ad-supported shows.
The price increases for Disney+ and Hulu will take effect in October. For the ad-free stand-alone version of Disney+, the monthly cost will increase to $13.99 from its 2019 introductory price of $6.99. Meanwhile, the price of the ad-free Hulu service will rise to $17.99 from $14.99 The company also launched a new bundle called the Duo Premium, which pairs Disney+ and Hulu without ads for $19.99 a month.
Revenues for the fiscal quarter ending July 1 and nine months grew 4% and 8%, respectively, with reported diluted earnings per share from continuing operations of a loss of $0.25 compared to income of $0.77 in the prior-year quarter.
