Disney sent shockwaves through the business world this week with the announcement of yet another price hike for Disney+. Coming just nine months after their last increase, the quarterly earnings report revealed deeper troubles hiding beneath the surface.
Most concerning of all, domestic Disney+ subscriber growth actually declined 1% in back-to-back quarters, down to 44.5 million subscribers in the US and Canada. While international markets grew 2% to 152.1 million subscribers total, stagnation at home is an ominous sign for long-term viability.
With the new price hike taking Disney+ ad-free to $13.99/month beginning October 12th, a $3 price increase in less than a year, retaining subscribers will be critical. But raising prices risks pushing more valuable domestic customers over the edge, as they face a broad range of options.
Streaming has long been touted as the future of entertainment, but Disney’s struggles raise pressing questions about the long-term viability of the sector. After years of astronomical growth, are we reaching peak streaming? Disney is far from alone in hitting roadblocks.
Netflix has laid off hundreds after consecutive subscriber losses. Warner Bros. Discovery drastically reworked their strategic vision after massive streaming losses. Even market leader Netflix is bracing for more declines. As economic uncertainty looms, discretionary services are increasingly on the chopping block.
Disney’s misfires run deeper than short-term trends, however. Massive content spending has failed to translate into profits as projected. Password sharing persists as a thorny problem with no clear solution. Most concerning of all, domestic subscriber growth ground to a halt in back-to-back quarters.
While international markets remain ripe for expansion, stagnation at home is an ominous sign. Are consumers simply reaching saturation after a pandemic-fueled boom? With competition more intense than ever, retaining subscribers is critical – but raising prices risks pushing more over the edge.
Disney has staked their future on streaming-dominating entertainment. But their grand vision shows cracks as losses mount and linear assets fade. Iger’s successor faces difficult decisions balancing growth ambitions with financial realities. If even mighty Disney cannot make streaming profitable, the questions will only intensify about an entire industry’s long-term path. Turbulent times may yet lie ahead.
+ There are no comments
Add yours