Disney+ Drops 2.4M Subscribers in Q1 2023 as International Customers Dip for First Time
Disney released its first fiscal 2023 quarterly earnings report on Wednesday, Feb. 8. From October through December, Disney+ lost 2.4 million subscribers to Disney+, bringing its total to 161.8 million overall. That number represents a year-over-year increase of 32 million customers or nearly 25% of its subscriber base from the 129.8 million Disney+ reported having at this time in 2022.
Last quarter, the House of Mouse’s flagship streaming service added 12.1M subscribers, reaching 164.2M overall. The decline is fueled exclusively by a decline of 3.8 million subscribers to the Disney+ HotStar service in India. Last quarter marked the end of Disney's streaming rights to the incredibly popular Indian Premier Cricket league. The company opted to secure the broadcast linear rights for future IPL seasons.
Hulu reported adding 800,000 customers to rise to 48 million subscribers, while ESPN+ added 600K to come in at 24.9M. The new numbers mean that Disney’s collective streaming total of 234.7M customers — combining with Disney+, Hulu, and ESPN+ — is again above Netflix's global subscriber count of 230.75M. Disney’s numbers do not account for overlap from the Disney Bundle, which the company claims accounts for over 40% of its total subscriber count.
NBCUniversal’s streaming service Peacock reported having 20 million paid users at the end of the fourth quarter, more than doubling its total in the span of 12 months.
Warner Bros. Discovery does not report its two disparate streaming services’ subscriber numbers separately, but it most recently announced that it had 94.9 million users between HBO Max and discovery+. Last fall, Paramount Global reported that Paramount+ managed to climb to 46 million global users in Q3, seeing an increase of 4.7 million users in that quarter. Neither Prime Video nor Apple TV+ report their monthly user totals publicly.
The numbers indicate that so far, Disney+’s new ad-supported tier has not been a juggernaut when it comes to driving new subscriptions. Disney+ Basic was first released to the public in December as a way to help the service pull in more profits. Less than 20% of non-Disney+ users said they were likely to sign up for the plan, so the jury on its long-term success in driving profits up remains very much out.
The company is still looking for other methods to help it claw its way out of streaming losses topping $1 billion. A $1.5 billion loss in Q3 of 2022 was part of the calculus that led Disney to depose former CEO Bob Chapek, and reinstall Bob Iger as chairman. Iger has stated he will not pursue large acquisitions during his second tenure, and some analysts are wondering if he’s gearing up to sell assets such as Hulu and ESPN to help the company’s bottom line.
Despite the atmosphere of uncertainty around Disney, the company is still expected to be one of the leading content spenders in the industry in 2023. To offset this and build more revenue, the company is reportedly exploring the possibility of licensing certain content to third-party streamers.
Disney has also adapted the advertising tools it uses on Hulu for Disney+. These tools will help Disney give its advertisers more relevant data regarding user age, location, and gender, among other statistics.
Despite all the moves Disney has made to bolster its streaming arm, some investors think enough is enough. Activist investor Nelson Peltz thinks the company should either swallow its medicine and purchase the final 33% of Hulu it does not currently own from Comcast, or get out of streaming altogether.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”