The Disney Problem: The Newly-launched Disney+ App and the New Prospects for a Smooth Online Entertainment Experience for Consumers
Going into the call, Disney was facing a problem. In August, the last time the Mouse House detailed quarterly earnings, it reported a loss of more than 11 million Disney+ subscribers worldwide. It had shed subscribers the quarter before, too. Overall, the streaming service lost $512 million that quarter, bringing total losses to $11 billion since the launch of Disney+ in 2019. The company said at the time that it would shift away from the effort of trying to attract new subscribers and focused on more lucrative pricing structures.
Katz points out that streaming is costly and that only Netflix is “consistently profitable.” He says Disney is “making steady progress,” especially now that it controls Hulu. With plans for a single app that will offer both Disney+ and Hulu content, one can expect the app to attract a much broader audience and create a more seamless entertainment experience for consumers. We don’t want to be spending so much time looking for content.
The plans are in motion if the Wednesday call is any indication. Disney+ added 7 million new subscribers in the past three months, most of them on ad-supported tiers, bringing the total worldwide subscriber base to 112 million. It may seem small compared to the number of customers, but the gains seem good when considering that Max lost about one million customers in the same time period.
The site that has not done well is Disney World in Florida. The company said declines there were due to the end of its 50th anniversary celebrations, the closing of Star Wars: Galactic Starcruiser, and wage inflation.
After several months of negotiations, Disney agreed to raise union workers’ pay to $18 per hour by the end of 2023, with additional increases over the next three years. “They have earned the right to be paid more”, says Rick Munarriz, senior media analyst at The Motley Fool. It’s difficult to deal with tourists. It does mean that… In the process, profits take a hit.
New Streaming Services in Sports: The Disney-ESPN and TV+ Inclusive Plans Revisited Over the Last Three Months
- Disney is all in on the direct-to-consumer model of sports. The company claims the sports network’s revenue has grown. During the earnings call, Iger said ESPN is the number 1 brand on TikTok “with about 44 million followers.” They hope to find partners, such as sports leagues, that will help with technology, marketing andcontent with the goal of turningESPN into a “preeminent digital sports platform.”
Disney has ambitions to grow and cut costs, but its goal is to increase efficiency by $2 billion.
The cost of its ad-free plan went up from $11 to 14 on October 12. The prices of the two services rose at the same time. Other streamers have made similar shifts. Last month, Netflix announced price hikes while showing subscriber growth amid password-sharing crackdowns. Apple TV+ also increased prices. Max has kept its prices pretty much the same, but hasn’t seen much subscriber gains.