Disney has just announced its financial results for the fourth quarter of 2022. The company recorded a total of 161.8 million subscribers for its Disney+ streaming service, a decrease of 2.4 million subscribers compared to the previous quarter. It is also the first time that Disney's streaming service saw a loss in subscribers since it was launched in 2019.
Disney mainly attributes the subscriber decline to a decrease in Disney+ Hotstar subscribers, an over-the-top streaming service available in India and some parts of Southeast Asia. As Forbes points out, it lost streaming rights last year to the Indian Premier League, a popular cricket league in India. This forced Disney to lower its growth projections for Disney+ Hotstar. Currently, the service has 57.5 million subscribers, a 3.8 million decrease from the previous quarter's 61.3 million.
Disney+'s subscriber loss will make it difficult for Disney to reach its target of 215 million to 245 million subscribers by the end of fiscal year 2024 (via CNBC). The company even expects Disney+ to become profitable by the same period.
Despite this setback, Disney+ subscriptions were up by 200,000 in the U.S. and Canada. Meanwhile, subscribers of the company's other streaming services, Hulu and ESPN+, increased by 800,000 and 600,000, respectively. The company's revenue in the fourth quarter also rose 8% to $23.5 billion, barely beating analysts' expectations of $23.3 billion.
As a move to make Disney+ profitable, Disney is planning a significant restructuring and job cuts that will affect 7,000 employees. This is equivalent to 3% of the company's global workforce.
"I have enormous respect and appreciate for the dedication of our employees worldwide," Disney CEO Bob Iger said during the earnings call. "While this is necessary to address the challenges we face today, I do not make this decision lightly."
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