It is a decision “necessary to deal with the current difficulties”, according to the declaration of the general manager Bob Iger during a conference call. In search of profitability for its streaming platforms, including Disney + which lost subscribers for the first time in its history, Disney announced on Wednesday the layoff of 7,000 people.
Disney+ now has 161.8 million subscribers worldwide, following losing 2.4 million in the final three months of 2022. It’s the first time since the streaming service launched in late 2019 that it hasn’t. not gain millions of new viewers in the past quarter.
“Its meteoric rise is considered one of the most successful deployments in the history of the media”, welcomed Bob Iger, who launched the service before giving way to Bob Chapek in 2020, following fifteen years at the orders. Disney asked him in November to return to his duties, in particular to tackle the problems of profitability of the platforms. “It’s time to complete another transformation, to streamline our formidable streaming business and put it on the path to sustainable growth and profitability,” detailed Bob Iger, referring to the need to “cut costs” and “to improve margins”.
He then announced the social plan. The American group employed 190,000 people worldwide in 2021, 80% of them full-time, according to its annual report for that year.
Investors reassured
Investors were reassured: the Disney action took off up to 8%, before stabilizing at 6% during electronic trading following the closing of the New York Stock Exchange. The market welcomed Disney’s financial performance for the period from October to December, published in a press release on Wednesday.https://www.leparisien.fr/culture-loisirs/disney-rappelle-son-emblematique-patron -bob-iger-21-11-2022-QCIMFJCPA5BJLH6XWNVVOVMK6Q.php
The enchanted kingdom achieved a quarterly turnover of 23.5 billion dollars, better than expected by analysts.
Above all, the operating losses of its streaming platforms (Disney +, ESPN + and Hulu) came out lower than expected, at $1 billion. The group is targeting profitability for Disney+ in 2024.
Streaming platforms experienced blazing growth for years, further amplified by the pandemic, before being overtaken by the economic crisis and frantic competition for audience attention. “Subscriber growth will not be linear each quarter,” warned Christine McCarthy, Disney’s chief financial officer, in November, when the star platform had just gained 12 million subscribers in one quarter.
Netflix, the industry veteran and leader, had a tough first half of 2022 losing nearly 1.2 million subscribers, before bouncing back this fall and winter. The platform has more than 230 million paying subscribers but its annual net profit fell 12% to 4.5 billion.
Streaming applications make the same observation as social networks like Snapchat, Facebook or Instagram: gains in users no longer automatically translate into financial gains.
