2023-08-10 14:34:00
After Netflix and Warner Bros Discovery (HBO) in 2022, it’s Disney’s turn to suffer the consequences of the end of the golden age of video streaming. On the evening of Wednesday August 9, the group led by Bob Iger once once more announced disappointing financial results. For the third consecutive quarter, Disney+, its subscription video-on-demand (SVoD) service, lost subscribers: this time, 10 million subscribers left in the second quarter of 2023.
With 146.7 million subscribers overall, Disney+ is still number three worldwide behind Netflix (238.4 million) and Amazon Prime (around 200 million). But the service is indeed facing a growth failure. And it is all the more worrying that the SVoD activity remains loss-making for the group, even if it continued to reduce its operating losses over the quarter, to 512 million dollars instead of 1 billion last year at the same period. ” It’s encouragingcommented Paul Verna of Insider Intelligence, but that’s mostly due to massive layoffs and lower content spending, rather than real growth ».
Streaming: towards a new price increase in 2023 for Disney +
Disappointments in India… but also in the United States
The group tries to put things into perspective by insisting that most of this loss of subscribers comes from India. The Indian market accounts for almost a third of the total number of subscribers worldwide, but Holstar, the local version of Disney+, has lost the broadcasting rights for the Indian cricket championship, which has a strong impact on recruitment and retention of subscribers in this crucial market.
But that would be to forget that Disney+ has lost 18 million subscribers since its peak in September 2022 at 164.2 million subscribers. Above all, the leak also reached the United States. Disney+ lost 1.4 million subscribers there in the second quarter of 2023, following the 1.6 million in the previous quarter.
In other words, India might be the tree that hides the forest, and the market wonders if Disney+ has not reached a ceiling, including in the United States. It would be a disappointment because the service aimed to compete with Netflix, but the world leader caps much higher.
Weakened by its streaming channels, Disney lays off 7,000 people
Copy of Netflix Remedy: Rising Prices, Ads, and Fighting Account Sharing
To find the path to growth and strengthen its revenues, Disney+ is therefore doing in 2023 what Netflix did in 2022 and which allowed it to rebound. Once once more, it is the consumers who drink. The group announced the general increase in prices from November 1, in the United States as elsewhere, including in France.
Instead of a single offer at 8.99 euros per month in France, Disney + will create three offers: “Standard with ”, at 5.99 euros per month, for two simultaneous screens but with advertisements. The current “Standard” plan, at 8.99 euros per month without ads, is kept at the same price… but with a few fewer features: only 2 simultaneous screens and reduced video quality compared to the new “Premium” offer. billed at 11.99 euros per month, which in fact takes up the current “Standard” offer… but for three euros more.
Attention, Disney + will switch from November 1st all subscribers to the current “Standard” offer on the “Premium” offer. To keep the price of 8.99 euros per month, the consumer will not only have to accept the reduction in services but, above all, he will have to take the step himself of going to the account settings to choose to stay on the Standard offer. This inelegant maneuver, which aims to push users to pay three euros more for the same offer by betting on the fact that a party will forget to make the changes, should allow Disney + to significantly improve its revenue per subscriber.
Like Netflix, Disney+ will also hunt for account sharing. Bob Iger said the company ” actively exploring ways to address account sharing », this practice which consists in sharing its identifiers with other members outside the household who thus benefit from the service for free. Tolerated until now as a means of promoting content, account sharing was banned by Netflix at the end of last year, because it affected 100 million users. This decision allowed him to convert several million of these users into paying subscribers, and to return to strong growth in 2023. For his part, Bob Iger refused to reveal the number of “free” users, but he says he East ” important and that the company has the technical capabilities to prevent account sharing in 2024.
2023, the year of upheaval in video streaming (Netflix, Canal+, OCS, Disney+…)
Hulu’s full takeover seems to be getting closer
Bob Iger also revealed price increases for Hulu, a hugely popular SvoD service in the United States with 44 million paying subscribers. Launched in 2007, very well established in the landscape and renowned for its range of adult series – which Disney+ now partially integrates internationally under the Star brand – Hulu is two-thirds owned by Disney and 33% by Comcast, parent company of rival Universal. Above all, Hulu is, along with Netflix, the only other profitable streaming service. Its secret: its powerful platform, on which the rest of the market relied when launching offers with advertisements.
Since last year, the suspense around the future of Hulu has been at its height: which of Disney or Comcast will buy back, when their deal expires in 2024, the shares of the other to become the sole owner? While the two shareholders have shown interest, Disney seems the logical candidate, since it already owns 66% of the shares. In 2022, Disney had estimated the valuation of Comcast’s shares in Hulu at $27.5 billion, and therefore that of Disney at $55 billion for Comcast. A substantial sum to come out for the two giants.
The announcement, this Wednesday, of the creation of a Disney + / Hulu bundle in the United States, for 19.99 dollars per month, indirectly indicates that Disney will indeed position itself to buy back Comcast’s shares. The objective for Disney: to take advantage of Hulu’s programs and its expertise, an area in which it is clearly lagging behind.
Eventually, it is possible to imagine that Disney will fully integrate Hulu into Disney + at a price of $ 19.99, which will allow it to better compete with Netflix, Amazon Prime and Max (the Warner Bros Discovery service) in terms of catalog. , while generating more revenue from subscriptions and . In turn, if Disney + / Hulu are worth $ 19.99 per month, the competition should be in tune. This means that 20 dollars/euros per month might be the new tariff standard in a few years for “big” services like Netflix, Disney+ and Max.
Disney: former general manager Bob Iger called back urgently to restore momentum to the Enchanted Kingdom
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