For the second consecutive quarter Disney has lost subscribers, 4 million in this last period. The streaming platform has been chaining losses for months, mostly related to the loss of cricket rights in India, as well as a large decline in the North American market, with a decrease of 300,000 users.
Faced with this situation, Disney has announced that it will take drastic measures to achieve that profitability. The idea is to imitate the Warner Bros. plan with HBO Max that they criticized so much, and which consists of removing content from the platform and reducing the amount of money invested in the creation of original material. The company is considering other steps, as Chief Executive Officer Bob Iger noted on a call with analysts at the Burbank, California-based company last week.
Due to the removal of content from the platform and the reduction of investment in the creation of original material, previously mentioned, Disney plans to increase the price of the platform's service without advertising this year. Together these changes are expected to generate a charge of up to $1.8 billion.
"We will remove certain content from our streaming platforms and expect to take an impairment charge of between $1.5 and $1.8 billion," said Christine McCarthy, the company's CFO. For his part, Iger also explained that the option of combining Hulu and content at the end of 2023 was being considered. Disney in one app. This move would suggest that the company buy Comcast Corp.'s one-third stake in Hulu.
These measures are in addition to those announced last March, when Disney announced that it was eliminating the division dedicated to experiences related to interactive narrative and also laying off some 7,000 employees.
Disney shares fell sharply. And it is that only one hour after the opening, the titles of the company were devalued close to 9%; which was the largest decline among the thirty stocks that make up the Dow Jones. These losses occurred after the company presented its accounts for the first half of its fiscal year on May 10, when it had profits of 2,550 million dollars (2,321 million euros), with a year-on-year increase of 62%.
Although quarterly income in streaming increased 12% more than the previous month and reduced its operating losses to 659 million (26% less than the previous balance), it should be noted that in general the number of subscribers at Disney has decreased , 4 million fewer subscribers. Of course, Hulu and ESPN, also owned by the company, experienced slight increases, standing at 48.2 million and 25.3 million subscribers, respectively.