Subscriber Targets for Disney+ Revised Downward as Company Grapples with Continuing Churn in India
Whatever else can be said about Bob Chapek’s tenure as CEO of the Walt Disney Company, he was certainly a visionary. Chapek was an especially big believer in the company’s flagship streaming service Disney+, so much so that in May of 2022 he estimated that the streamer would have between 230 and 260 million users by 2024.
Then came Disney’s decision not to renew its deal for streaming rights to Indian Premier League cricket. The company knew that choice would lead to some cancelations from Indian customers, and revised its projections downward last August to between 215 and 245M users by 2024.
According to a report from Bloomberg, those projections are being revised downward once again by current Disney CEO Bob Iger. The report doesn’t give specific numbers, because Iger has decided to stop providing those types of projections going forward, similar to Netflix and other streaming outlets. As of its last earnings report, Disney+ has 146.1M global customers.
The service has dealt with three straight quarters of subscriber losses, but nearly all of these were due to the company’s decision not to continue with IPL cricket on Disney+ (called Disney+ Hotstar in India). Financially, Disney+ continues to be an albatross around the company’s neck, though Disney has managed to narrow its streaming losses from billions of dollars per quarter to hundreds of millions. Price increases and the introduction of an ad-supported tier in 2022 helped, and the company is planning a new round of price hikes which will take effect Oct. 12.
The service should get a boost in subscribers from its recent carriage deal with Spectrum. In that agreement, Disney decided to allow 14.7M Spectrum TV customers access to the ad-supported Disney+ Basic plan at no additional cost, which was one of Spectrum’s biggest demands in its recent carriage contract negotiations with Disney. The cable provider will pay Disney a wholesale rate for those users, so it won’t be the biggest monetary windfall for the company, but at least it will also be collecting more ad revenues thanks to the new viewers.
Cracking down on password sharing could also help Disney avoid having to revise down its estimates going forward. Iger has already confirmed that measures to stop account sharing would be introduced to Disney+ in 2024, and competitor Netflix has seen low churn statistics and a high conversion rate of password sharers to paying customers after introducing rules against sharing passwords earlier this year.
Disney is doing everything it can to make its streaming platforms the centerpiece of its entertainment offerings going forward, so its customer losses from India will almost certainly be redeemed at some point. It likely won’t be in 2024, however, which is why the company must revise its streaming subscriber estimates downward, and why it won’t be making those numbers public in the future.
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.”