Disney Plus Continues To Implode, Announces Loss Of 1.3 Million Subs Following Price Hike
You’re telling us that people didn’t want to pay more money for sub-par television content featuring bastardized interpretations of their favorite characters and story lines? Or Echo?
In a further blow to the company’s streaming dreams, the House of Mouse has announced that, thanks to a number of factors including its recent price hike, their Disney Plus service has bled a total of 1.3 million subscribers in the three-month period between their two most recent earnings reports.
This significant dip in Disney Plus’ subscriber count was first made public on January 7th courtesy of the company’s Chief Financial Officer, Hugh Johnston.
Detailing the current status of their streaming operations to attendees of Disney’s Q1 2024 earnings call, Johnston informed them that though the company’s Hulu platform had gained roughly 1.2 Million subscribers in the time since the company’s Q4 2023 earnings call in November, “Disney+ core subscribers decreased sequentially by 1.3 million”.
According to Johnston, this drop in Disney Plus subscribers was “driven by the expected temporary uptick in churn, given the recent domestic price increases, as well as the end of the global summer promotion [which offered new and returning users a three-month subscription for just $1.99].”
Further, the CFO claimed that these “impacts were partially offset by strong ad tier net adds due to domestic growth, as well as the launch in certain international markets in the first quarter.”
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Though the individual platform was reportedly having a rough time, Johnston noted that for their overall direct-to-consumer streaming operations had seen its “operating income improved by about $850 million versus the prior year, and by nearly $300 million versus Q4.”
To this end, the CFO also highlighted how, thanks to the service’s aforementioned price increase – in October 2023, Disney raised the price of Disney Plus’ ad-free tier by 27% from $10.99 to $13.99 – it had seen its average revenue per user (ARPU) increase “by $0.14 versus the prior quarter and by $1.07 versus the prior year”.
However, despite this massive drop in subs, Johnston ultimately asserted that, in terms of the future, the company was expecting “net adds of between 5.5 million and 6 million in the second quarter”, with a hopeful prediction of 7.5 million domestic subscribers looking to balance out a predicted decrease in international users.
As noted above, this is but the latest subscriber-based woe for Disney’s flagship streaming service.
Most notably, in their Q3 2023 report, the company revealed that thanks to a break in their licensing deal with India-based streaming giant HotStar, that quarter had seen Disney Plus lose a staggering total of 11.7 million subscribers – more than double the 4 million lost in the year’s first quarter and more than triple the 2.4 million lost in the final quarter of 2022.
While the company did see a slight uptick in platform usage to the tune of 7 million new subscribers in the last quarter of 2023, this same quarter also saw them burn $387 million in its operating costs.
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