Disney's streaming division has suffered significant losses in the third quarter of Fiscal Year 2023, according to the company's recent financial report.
The report revealed a continued decline in subscribers, a trend that began in the previous quarter and shows no signs of reversing.
Disney+ reported 146.1 million subscribers in Q3, marking a 7.4 percent decrease compared to Q2. The streaming division's segments were not equally affected, with Disney+ Hotstar experiencing the greatest loss of 24 percent. This decline was attributed to the service losing broadcasting rights for Indian Premier League cricket matches, leading to a mass exodus of customers.
During the earnings call, CEO Bob Iger expressed confidence in Disney's ability to recover from these losses. He emphasized the importance of three key businesses in driving growth and value creation over the next five years: film studios, parks, and streaming. Iger highlighted the interconnectedness of these businesses with Disney's brands and franchises.
Despite the challenges faced by the streaming division, Disney's overall revenue increased by 4 percent to $22.33 billion.
In response to the financial results, Disney has announced upcoming price increases for Disney+. Starting from October 12, the monthly subscription fee for Disney+ will rise to $13.99. Additionally, a joint subscription package for Disney+ and Hulu will be available for $19.99 per month. These price adjustments will only apply to the ad-free services.
Disney will also be implementing restrictions on password sharing, following in the footsteps of Netflix's earlier actions.
While Disney's film studios and parks are expected to drive the company's recovery, the Q3 earnings report indicates that there is still work to be done. Disney World in Florida reported a decrease in attendance, although parks outside the United States performed well.
Acknowledging the underperformance of some projected box office hits, Iger stated that Disney would focus on improving the quality of upcoming films.
In conclusion, Disney's streaming division has faced significant challenges in Q3, with declining subscribers and losses. However, the company remains optimistic about its ability to recover, with a focus on film studios and parks. The upcoming price increases and password sharing restrictions aim to bolster the streaming division's revenue.
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