Disney+ Subscribers Decline by 4 Million in Consecutive Quarters, but Streaming Losses Improve by 26%

Disney+ Subscribers Decline by 4 Million in Consecutive Quarters, but Streaming Losses Improve by 26%

By auroraoddi

In the first quarter of 2023, Disney+ experienced a drop of 4 million subscribers. Marking its second consecutive quarterly decline following a downward trend in 2022. However, there is a silver lining as Disney also managed to reduce its streaming business losses by $400 million. Representing a 26% improvement compared to the previous year.

During this challenging period, Disney’s CEO, Bob Iger, delivered better-than-expected quarterly earnings and revenue. Thanks to the outstanding performance of the company’s theme parks from January to March.

Despite facing company-wide layoffs, an ongoing writers strike, and a contentious relationship with Florida Governor Rick DeSantis. The strong showing at the theme parks contributed to Disney’s success in the fiscal Q2, which concluded on April 1.

Disney+ Misses Sub Estimates, Hotstar Decline, Hulu and ESPN+ Grow

Disney fell short of Wall Street’s estimated 163.17 million subscribers for Disney+, closing the quarter with 157.8 million subscribers. This decline was mainly driven by a 4.6 million drop in Disney+ Hotstar subscriptions, the service’s offering in India and parts of Southeast Asia.

The loss of streaming rights to Indian Premier League (IPL) cricket matches led to lowered growth targets for Disney+ Hotstar in India.

In the U.S./Canada, Disney+ lost approximately 300,000 subscribers, resulting in a total of 46.3 million. However, the platform gained nearly 1 million subscribers in international markets excluding Disney+ Hotstar.

Meanwhile, Hulu experienced modest growth, adding 200,000 subscribers to reach a total of 48.2 million. ESPN+ also saw an increase of 400,000 subscribers, bringing its total to 25.3 million.

Disney Announces Integration of Hulu Content into Disney+ and Strategic Content Review

During Disney’s recent earnings call with analysts, CEO Bob Iger revealed plans to introduce Hulu content on Disney+ later this year. Aiming to create a unified “one-app experience” for users.

Additionally, CFO Christine McCarthy announced that Disney is currently reviewing the content available on their Direct-to-Consumer (DTC) services to align with strategic changes in content curation. As a result, certain content will be removed from Disney’s streaming platforms.

McCarthy also disclosed that Disney anticipates a writedown of $1.5 to $1.8 billion in the third quarter due to the content removal. Going forward, Disney intends to produce lower volumes of content in line with this strategic shift. While the impact of content spending cuts will be more significant in 2024. Some reductions have already been committed for this year.

Analyst consensus data from Refinitiv projected earnings per share (EPS) of 93 cents on $21.78 billion in revenue. Disney’s reported figures were in line with expectations, with adjusted EPS of 93 cents on $21.82 billion in revenue. However, Disney posted negative free cash flow of $168 million for the quarter.

Disney Restructures Financial Results: Direct-to-Consumer Revenue Surges, Linear TV Networks Face Decline

In a major restructuring move, Disney has divided its financial results into two segments. Namely Disney Media and Entertainment Distribution, and Disney Parks, Experiences, and Products. The company’s fiscal Q2 2022 witnessed a notable 12% increase in Direct-to-Consumer revenue, reaching $5.5 billion. While the operating loss experienced a significant 26% reduction, standing at $1.1 billion, surpassing analysts’ expectations.

However, Disney’s linear TV networks faced challenges during this period. Revenue for these networks saw a decline of 7%, amounting to $6.6 billion, and operating income dropped by 35%, reaching $1.8 billion.

Within Disney’s domestic TV channels business, encompassing ABC and ESPN, revenue decreased by 4% to $5.6 billion. While operating income witnessed a notable 33% decrease, amounting to $1.6 billion. The drop in operating income was primarily attributed to lower ad revenue and increased costs related to sports programming and production.

The international channels’ revenue experienced a significant drop of 18%, totaling $1.1 billion, and operating income fell by 65%, reaching $85 million.

Amidst these challenges, Disney found a bright spot in its Parks, Experiences, and Products group. The segment witnessed a remarkable 17% increase in revenue, amounting to $7.8 billion, and operating income rose by 23% to $2.2 billion.

The growth was mainly driven by increased guest spending at both international and domestic parks and experiences. Primarily at Disney’s international parks and resorts.

Additionally, Content Sales/Licensing and Other revenues, including box office revenue, witnessed an 18% increase, totaling $2.2 billion. However, the segment reported an operating loss of $50 million, indicating improvement compared to the previous year’s increase of $16 million.


According to the Mickey Mouse company, the notable improvement in theatrical distribution results can be attributed to the ongoing success of a long-awaited. ‘Avatar: The Way of Water,’ which was released in the first quarter of the current year.

However, this improvement was partially offset by the comparison to co-production income in the previous-year quarter derived from Marvel’s ‘Spider-Man: No Way Home’. In the current quarter, Disney released ‘Ant-Man and the Wasp: Quantumania,’ while the prior-year quarter saw the release of ‘Death on the Nile.’

On Wednesday, Disney stock closed at a price of $101.14 per share. The regular U.S. stock markets are set to reopen on Thursday at 9:30 a.m. ET.

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