Usually a 2.4M subscriber loss would be headline news. With the concurrent announcement of (another) major restructure at Disney, however, this one has slid under the radar a little. Entertainment attorney Brandon Blake, at Blake & Wang P.A, analyzes this segment of the Disney quarterly reports in more depth.
Lost Cricket Rights
In fairness, the mostly international losses were not as bad as some pundits were predicting, but it’s still steep indeed. Especially given we were expecting ‘modest growth’ instead. Part of the exodus can be traced to the Indian market, where Disney+ Hotstar (Disney+ in this market) lost the digital IPL cricket rights to Viacom 18, although it kept the rights for the linear TV market. Here we see a staggering 3.8M subs lost, leaving them with 161.8M in the area.
Luckily, this is offset somewhat by North American gains of 200,000 subscriptions, taking the market’s total to 46.6M. Hulu also managed to add 800,000 subscribers (for a total of 48M). ESPN, meanwhile, reached 24.9M with 600,000 new subscribers. This leaves the wider Disney stable with 163.4M streaming subs. If you’ve been keeping notes, that’s still lower than the last earnings report.
Streaming Service Yet to Turn to Profit
While Disney’s D2C arm managed a 13% rise in profit, hitting $5.3B, we see their streaming arm produce a loss of over $1B. Again. While Disney still is firm in their stance the service will hit profitability in 2024, it’s convincing less people every time. So there’s little surprise much of the restructuring talk focuses on revitalizing this side of their accounts. No doubt the release of two tentpole films in the last quarter helped offset some of those woes.
While subscriber losses are never well received, the dangling carrot of Bob Iger’s new restructuring plans will doubtless detract from this loss for now. It will be fascinating to see what the next quarter looks like, however, as it’s clear Disney have now abandoned the subscribers-over-all tactics they were previously running on.
