The Walt Disney Company, the American multinational entertainment and mass media conglomerate, has reportedly announced that its over-the-top (OTT) services have surpassed that of long-time rival, Netflix.
According to the company’s earnings announcement made on Wednesday, Disney Plus supposedly added 14.4 million subscribers in the third quarter of the current fiscal year to reach a total of 152.1 million subscribers.
For the record, this figure is far beyond the industry consensus of 147.7 million.
All in all, considering the two other video streaming services of Disney, namely Hulu and ESPN Plus, the American entertainment heavyweight now has 221.1 million subscribers. In the context of streaming subscribers, it took Disney around five years to overtake Netflix, which launched its OTT services in 2017 and has over 220 million subscribers as of 2022.
Nevertheless, Disney has decided to lower its target number of membership-based customers for the fiscal year 2024. Back in 2020, it had estimated that the firm would gain 230 million to 260 million subscribers within four years.
Now, however, a new forecast by the company estimates the number of subscribers to be about 215 million to 245 million subscribers over the same period.
This significant reduction is due to the expiration of cricket broadcasting rights in India for Disney Plus Hotstar, which essentially targets Southeast Asia and the southern regions. As a result, Disney expects a decline in its subscriber count.
Disney also faces the challenge of improving its profitability in its streaming business.
Despite gaining OTT service membership users, Disney has been recording operating losses for quite some time. During the latest quarter, Disney suffered a net loss of $1.1 billion.
Given that droves of customers from Canada and the United States are switching to cheaper services than Disney Plus, the average profit from per streaming subscriber has gone down by 5% during the last quarter.
Consequently, Disney has announced that it will increase its streaming package prices starting December. The streaming heavy stated that it would charge $7.99 per month for an advertisement-based streaming package, and over $10.99 for a ad-free streaming tier.
Meanwhile, for the package that comprises of Hulu and Disney Plus, both with ads, the charges will come up to $9.99 per month.