As Disney approaches its third round of expected layoffs and deals with production delays due to the ongoing writers’ strike, the company brought more bad news to investors. The flagship streaming service, Disney+, lost four million subscribers 2nd quarter 2023, bringing the total to 157.8 million subscribers, compared to 161.8 million subscribers in the previous quarter. Analysts had expected subscriber growth of 163.17 million.
The main reason behind the drop was Disney+ Hotstar, which lost 8% of its subscriber base, going from 57.5 million subscribers in Q1 2023 to 52.9 million. Many viewers in India are angry with the company’s decision not to retain the streaming rights for the Indian Premier Cricket League.
Last quarter, Disney+ reported its first subscriber loss since its launch in 2019. The streamer saw a drop of 2.4 million subscribers in the first quarter.
CEO Bob Iger also revealed during the latest earnings call that Disney is about to undergo major restructuring, which will include job cuts that will affect 7,000 employees. So far, the company has had two waves of layoffs, with one more on its way.
Iger previously announced Disney’s plans to cut $5.5 billion in costs, including $3 billion in content spending. Disney also noted that it wants to prioritize the Marvel and Star Wars franchises over other titles.
However, the company recently interrupted productions for Marvel’s “Blade” and Star Wars series “Andor” following the Writers Guild of America (WGA) strike, which kicked off last week after the group failed to reach a satisfactory agreement with the Alliance of Motion Picture and Television Producers.
The writers rightly demand a higher fee and fairer streaming residues. In the streaming era, jobs are less consistent for writers, as shows tend to have fewer seasons than shows on cable.
If less content was released on Disney+ because of the strike, more viewers would probably consider canceling their subscriptions.
Despite the shortcomings, the company touted its improved financial performance for its streaming business. Losses fell to $659 million for the quarter compared to $1.1 billion in the prior quarter. Sales in the division also rose to $5.5 billion.
Meanwhile, Hulu added 200,000 subscribers to bring its new total to 43.7 million subscribers, up from 43.5 million in the previous quarter. ESPN+ also saw a jump in subscribers, totaling 25.3 million thanks to an increase of 400,000 subscribers.