CALIFORNIA: In the first three months of the year, Disney’s flagship streaming service reportedly lost 4 million customers due to a more extensive cost-cutting drive.
The Disney+ platform also reduced losses by $400 million (£316.5 million). As the traditional television and film market is declining, the studio behind Mickey Mouse, the Star Wars series, and the Marvel movies is under pressure to make its streaming business successful.
BBC reported that the major entertainment company Disney’s shares decreased by almost 5% in New York’s after-hours trade, the BBC said.
The company’s Hotstar service in Asia, which lost the streaming rights to show Indian cricket events last year, saw the most significant decline in subscribers. After hiking subscription fees, disney+ lost almost 300,000 subscribers in the US and Canada. As a result, Disney’s streaming division’s operational losses for the first quarter of this year dropped to $659 million. From the previous quarter’s $1.1bn, that amount decreased.
The company’s improved financial performance, according to Disney CEO Bob Iger, “reflects the strategic changes we’ve been making throughout the organisation to realign Disney for sustained growth and success.” A year ago, he predicted Disney+ had hit a “turning point” and would start to earn a profit.
The entertainment company saw its first decline in subscriber numbers earlier this year and revealed intentions to lay off 7,000 employees. After staging their first strike in fifteen years last week, thousands of Hollywood screenwriters for TV and films made the most recent announcement. The shift to streaming has drastically altered the traditional television and film industries, so they want improved remuneration and working conditions. 2007 saw the most recent writers’ strike. It cost the industry an estimated $2 billion and lasted 100 days.
Christine McCarthy, the chief financial officer of Disney, declined on Wednesday to estimate how much the most recent strike may cost the business. Numerous Disney initiatives, including those scheduled to air on Disney+, have already been put on hold due to the walkout. A firm with roots in traditional television, movies, and theme parks, Disney has recently invested billions of dollars in its streaming platforms, elevating it to one of the industry’s key players.
Through its three streaming channels, including the sports-focused ESPN+ and the more entirety entertainment portal Hulu, it currently has more than 231 million subscribers. Disney+ has around 158 million users globally, but that number still lags behind Netflix, which has 232.5 million.
