Thursday, July 18, 2024

Disney continues to squeeze its spending as subscribers to its streaming platform decline


Bob Iger, the head of the “Disney Plus” platform, announced that the site, launched at the end of 2019, lost its subscribers for the third quarter in a row, but the California-based group promised to get back on track. Profit this summer, cutting its costs and raising subscriber prices and stricter restrictions on sharing passwords between users.
Sharjah 24 – AFP:

The “Disney Plus” platform, launched at the end of 2019, lost its subscribers for the third quarter in a row amid huge media fanfare, but the California-based group promised to return to profitability this summer.

The results aren’t the only problem for Disney, which along with other Hollywood studios is facing a historic strike by screenwriters and actors, in addition to its modest revenues in the group’s traditional channels of theaters and television.

Yesterday, Wednesday, Disney released mixed quarterly results for the April to June quarter, which posted revenues of $22.3 billion, a slight year-over-year increase but slightly below analysts’ expectations, and it reported. An increase in the price of Disney Plus subscriptions.

Thus, in the ad-free version, a monthly subscription to the platform will rise from $11 to $14 next October in the United States, double the initial price four years ago.

Group CEO Bob Iger said during a conference call Wednesday that we raised our prices early in 2022 and we didn’t see a significant drop in subscriber numbers, which was a relief for us.

The company wants to tighten restrictions on sharing passwords between users by 2024 and prevent content from being enjoyed for free.

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This time allowed Netflix to increase its number of subscribers in the second quarter of this year.

The world leader in streaming has more than 238 million subscribers worldwide, compared to Disney Plus’ 146 million.

From the end of September to the end of last June, the Disney Plus platform lost a total of 18 million subscribers, mainly due to a decline in the number of subscribers in the Indian market.

Hotstar, India’s version of Disney Plus, accounts for nearly a third of the platform’s global total, but lost the rights to telecast the national cricket tournament.

In North America, the service saw a slight 1% drop in subscribers, the second in a row, but Kevin Lansbury, the platform’s executive finance director, promised that subscriber numbers will rebound this summer. In America and around the world, except India.

Bob Iger noted that 3.3 million people have signed up for the ad-supported format since it was introduced late last year.

From a financial perspective, the streaming business continues to be loss-making, but continued its operating loss in the quarter, which narrowed to $512 million instead of $1 billion in the same period last year.

That’s encouraging, notes Paul Verna of Insider Intelligence, but it’s more due to mass layoffs and lower content spending than real growth.

Sales of Disney movies and shows fell 7% year over year to $6.7 billion, and the company’s operating profit fell 23% to $1.9 billion.

In contrast, revenue from theme park, cruise and derivative products rose 13% to $8.3 billion.

On Wall Street, Disney shares initially fell in electronic trading after the close on Wednesday, but rose about 3% after the price hike announcements.

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The board, led by Chairman Bob Iger, has pledged to save money this year, particularly by cutting 7,000 jobs and reducing content production.

The 72-year-old Iger, who will be in office until the end of 2022, previously led the company from 2005 to 2020, and the group’s board of directors voted unanimously last July to extend his contract through the end of 2026.

But his popularity has been waning in recent months, and he faces a historic strike in Hollywood, where actors joined scriptwriters in mid-July to demand a raise in their salaries, while streaming services dropped in value. They want assurances regarding the use of artificial intelligence.

However, according to Bob Iger, who chanted slogans against him during demonstrations from Los Angeles to New York, these claims were “untrue”.

Iger declared that nothing is more important to the company than its relationship with the creative community, actors, writers, directors and producers, and pledged to personally work to find solutions.

Meanwhile, the strike will allow Disney to save money, according to Kevin Lansbury, as studios spend less money on production.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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