Disney loses $512 MILLION in Q3 streaming disaster following subscriber exodus

Disney unveiled its Q3 results for Fiscal Year 2023 on Wednesday, disclosing significant losses within its streaming sector.

Throughout the three-month interval, the major entertainment company witnessed a continual drop in its subscriber count, a pattern that initiated in the previous quarter of FY2022 and has shown no signs of reversing.

As per CNBC, Disney+ documented 146.1 million subscribers during Q3, representing a 7.4 percent decline compared to Q2. Nevertheless, not all segments of the streaming division were affected in the same way. Notably, Disney+ Hotstar experienced the most substantial setback, losing 24 percent of its subscribers due to the loss of broadcasting rights for Indian Premier League cricket matches.

During the earnings call, CEO Bob Iger conveyed optimism about Disney's ability to recuperate the losses. He outlined his belief that three sectors—film studios, parks, and streaming—tightly connected to the company's brands and franchises, would be the primary drivers of growth and value creation in the next five years.

Overall, Disney's revenue experienced a 4 percent increase, reaching $22.33 billion.

Disney recently announced its intention to raise the monthly cost of Disney+ to $13.99 and introduce a combined Disney+ and Hulu subscription priced at $19.99 per month. This rate adjustment will become effective on October 12 and will only be applicable to the ad-free services.

In addition to the price revision, Disney is also planning to enforce limitations on password sharing, emulating a move made by Netflix earlier this year.

While Iger emphasized the anticipated role of Disney's film studios and parks in the company's recovery strategy, the Q3 earnings pointed out that there is still progress to be made.

Regarding the parks, those located outside of the United States demonstrated strong performance, while attendance at Disney World in Florida witnessed a decline.

A number of highly anticipated movies fell short of box office expectations, leading Iger to declare that efforts would be concentrated on enhancing the quality of the upcoming film releases.