As Disney approaches its third round of expected layoffs and deals with production delays due to the ongoing writers strike, the company delivered more bad news to investors. Its flagship streaming service, Disney+, lost a whopping four million subscribers in Q2 2023, bringing the total to 157.8 million subscribers, compared to 161.8 million subs in the previous quarter. Analysts expected 163.17 million.
The main reason behind the decline was because of Disney+ Hotstar, which shed 8% of its subscriber base, going from 57.5 million subs in Q1 2023 to 52.9 million. Many viewers in India are upset 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 inception in 2019. The flagship streamer saw a drop in 2.4 million subscribers in Q1.
CEO Bob Iger also revealed during the last earnings call that Disney is set to undergo major restructuring, including job cuts that will affect 7,000 employees. So far, the company has had two waves of layoffs, with one more on the way.
Iger also previously announced Disney’s plans to save $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 paused productions for Marvel’s “Blade” and Star Wars series “Andor” as a result of 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.
Rightly so, the writers are demanding higher compensation and fairer streaming residuals. In the streaming age, jobs are less consistent for writers since shows typically have fewer seasons than shows on cable.
If less content were to release on Disney+ because of the strike, more viewers would likely consider canceling their subscriptions.
Despite the shortcomings, the company touted its improved financial performance for its streaming business. And by improvement, they mean its losses decreased to $659 million for the quarter compared to $1.1 billion in the quarter prior. Revenue was also up in the streaming division, rising to $5.5 billion.
Meanwhile, Hulu added 200,000 subscribers to bring the new total to 43.7 million subs, up from 43.5 million in the previous quarter. ESPN+ also saw a jump in subscribers, getting a total of 25.3 million following an increase of 400,000 subs.