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Disney+ plans to end password sharing between users

LLaunched with great fanfare in 2019, the Disney+ platform, which is directly linked to the American animation studio, is currently experiencing a slowdown in its progress. In fact, the latest quarter is the third straight quarter that the streaming platform has lost subscribers. However, the California-based group has promised to reverse the trend this summer to improve its profitability.

This is not the only concern of the enchanted kingdom, which is facing an historic strike by screenwriters and actors, as well as mediocre revenues at cinemas and TV stations, its traditional broadcasters. On Wednesday, Disney released mixed quarterly results for the period April through June — $22.3 billion in revenue, up slightly year-on-year but slightly below analysts’ expectations — and announced a price increase for Disney+.

The platform’s ad-free monthly subscription will rise from $11 to $14 in the US in October, double what it was four years ago. “We had raised our prices back in 2022,” Bob Iger, the company’s chief executive, said during a conference call Wednesday. “And we hadn’t seen any significant drop in subscriber numbers, which was encouraging.” The company also has plans to tighten the screw on sharing passwords between users in 2024 to prevent them from enjoying content for free.

This method allowed Netflix to see an increase in subscriber numbers in the second quarter. The industry pioneer has more than 238 million worldwide, and Disney+ has 146 million.

18 million fewer subscribers

From the end of September to the end of June, the Mickey and Marvel platform lost a total of 18 million subscribers, mainly due to the Indian market. Hotstar, Disney’s local version, weighs almost a third of the world total but has lost the rights to broadcast the national cricket championship. In North America, the service saw a slight 1% decline in subscribers, the second in a row.

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But this summer, the number of Disney+ subscribers, with the exception of India, “will increase again in the US and internationally,” promised Kevin Lansberry, interim chief financial officer. Bob Iger was also pleased that 3.3 million people have subscribed to the subscription with advertising since it launched late last year.

Financially, the streaming activity remains loss-making, but continued to trim its operating losses during the quarter to $512 million from $1 billion in the same period last year.

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“It’s encouraging,” Insider Intelligence’s Paul Verna commented, “but it’s mostly due to massive layoffs and declining content spending, not real growth.”

Disney also saw a 7% year-on-year decline in sales of movies and programs to theaters and TV, to $6.7 billion. The company’s operating profit fell 23% to $1.9 billion. Only revenue from amusement parks, cruises, and related products rose significantly, up 13% to $8.3 billion.

7,000 fewer jobs

On Wall Street, Disney shares initially fell in electronic trading after the close on Wednesday, but rose nearly 3% on announcements of price increases. Led by boss Bob Iger, the Enchanted Kingdom has set out to save money this year, particularly by cutting 7,000 jobs and reducing content production.

Mr. Iger, 72, was recalled to the helm in late 2022 and had previously led the company from 2005 to 2020. The group’s board of directors voted unanimously in July to extend his contract until the end of 2026.

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But the iconic leader has waned in popularity in recent months. He is facing a historic strike: the actors joined the screenwriters in mid-July to demand an increase in their salaries, halfway up in the age of streaming, and want guarantees against the use of artificial intelligence (AI).

“Unrealistic” demands, according to Bob Iger, were shouted down at demonstrations from Los Angeles to New York. “Nothing is more important to this company than its relationship with the community of creators, actors, writers, directors and producers,” he said Wednesday, before committing to “personally working to find solutions.” Meanwhile, Kevin Lansberry said the strike will save Disney money as studios spend less.