Disney+ has reached 118 million subscribers worldwide, but analysts had predicted that millions more would sign up, resulting in a drop in the entertainment giant’s share price. Disney Bob Chapek, the company’s chief executive, told analysts on an earnings call that the two-year-old service has faced some pandemic pressure to land new shows and movies.
“Obviously we’re only two years in Disney+ The appetite for content for launch and service is exceptional. ,
Rival Netflix has promised to significantly increase its line-up of original programming after suffering production delays due to the pandemic. Disappointing growth at Disney+ comes as the company tries to regain momentum in its travel and theme park businesses, which have been hit by the pandemic.
“We’ve made great strides in reopening our businesses direct-to-consumer and in our parks, especially by taking meaningful and innovative steps with our popular new Disney Genie and Magic offerings,” Chapek said.
The impact on parks and movies
To celebrate two years of Disney+’s launch this week, Disney also has a big promotion planned on Friday. More worrying for investors, average monthly revenue per Disney+ subscriber fell 9 percent year-over-year to $4.12. In its earnings release, the group attributed the decline to cheaper membership in certain markets such as India and Indonesia.
US entertainment giant Disney said on Wednesday that its flagship streaming service slowed down more than expected in the recently ended quarter as the pandemic rages on. It also noted that Disney+ is facing cost overruns in terms of content production, marketing and technology. Disney’s stock fell four per cent at the end of trading on Wednesday. But the very popular streaming service benefits from its parent company’s controversial strategy, which involves releasing some movies simultaneously in theaters and online, with additional costs for subscribers on the platform.
After “Mulan” in 2020, “Black Widow” and “Jungle Cruise” were released in theaters this summer to great displeasure and stars like Scarlett Johansson, who criticized the loss of earnings for them. “When they were putting blockbuster movies into streaming service at the same time as theaters, that was worth the price of admission,” said Rob Enderle, technical analyst at Enderle Group, of Disney.
“But, that driver has evaporated.” According to the analyst, Disney has changed course as of late, letting the movies run in theaters for a period of time before coming to the streaming service. “If they’re going to force you to go back to the theaters again, then Disney+ becomes redundant,” Enderle said.
“At some point Disney will have to make a decision in favor of cinemas or their service, and that’s a difficult decision.” In total, Disney’s platforms (Disney+, ESPN+ and Hulu) have 179 million subscriptions and have generated a turnover of $4.6 billion. Due to the much-anticipated reopening of all of its theme parks around the world, the parks and merchandise business doubled its revenue to $5.5 billion.
“We are being affected by reduced operational capacity due to health restrictions,” Disney said in its statement. Disney is also expected to cost more to make the film and grow its other business, with inflationary pressures being felt in the economy.
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