Can a company truly be thriving as its flagship streaming platform is losing over a million subscribers?
Conventional wisdom would say “no,” but Disney CEO Bob Iger apparently thinks otherwise.
On Thursday, Disney dropped its first quarter earnings report for fiscal 2024, and there were some curious distinctions made by the House of Mouse.
Speaking via the report, Iger claimed that whatever (major) issues that had been afflicting the Walt Disney Company were now in the rear view mirror.
“Just one year ago, we outlined an ambitious plan to return The Walt Disney Company to a period of sustained growth and shareholder value creation,” Iger said.
Keep in mind that Iger has found himself under some intense scrutiny of late, given his exorbitant salary and Disney’s box office woes.
Iger added: “Our strong performance this past quarter demonstrates we have turned the corner and entered a new era for our company, focused on fortifying ESPN for the future, building streaming into a profitable growth business, reinvigorating our film studios, and turbocharging growth in our parks and experiences.
“As we build for the future, the steps we are taking today lend themselves to solidifying Disney’s place as the preeminent creator of global content.
“Looking at the renewed strength of all of our businesses this quarter – from Sports, to Entertainment, to Experiences – we believe the stage is now set for significant growth and success, including ample opportunity to increase shareholder returns as our earnings and free cash flow continue to grow.”
Have you ever been subscribed to Disney+?
In spite of those boastful claims, the rest of the earnings report isn’t nearly as rosy.
Disney explained away the decreased domestic operating income in the report by claiming that lower advertising revenue was “primarily due to a decrease at the ABC Network attributable to fewer impressions and lower political advertising revenue at the owned TV stations.”
The explanation for the decrease in international operating income was even more succinct.
“The decrease in international operating income was due to lower affiliate revenue primarily attributable to fewer subscribers,” the report stated.
The raw numbers also reflect significant losses.
Looking at the difference in Disney+ — Disney’s flagship streaming platform — subscribers from just Sept. 30, 2023, to Dec. 30, 2023, doesn’t really show much of a corner being turned.
In September, Disney+ featured 112.6 million subscribers.
Fast forward to the end of the quarter, and that number dropped to 111.3 million subscribers by the end of December, totaling a 1.3 million subscriber loss.
That may seem like a negligible loss given the raw total number of subscribers, but you have to remember how cutthroat and competitive the streaming space is.
Netflix, the king of streaming at the moment, gained 13 million subscribers in its last fiscal report.
And as Statista pointed out, Netflix gaining those 13 million subscribers ballooned its total subscriber base to over 260 million users — more than double what Disney+ sports.
The rest of the earnings report tries to explain away the decrease in park attendance and other losses in classic corporate-speak, as well as a number of other claims (with minimal credit to Disney, it does appear that the company has increased revenue overall thanks to its infamously inflated prices).
At the very least, it does appear Iger’s rhetoric and the revenue totals from the earnings report have sparked a small bump in Disney’s stock. According to CNN, “Disney’s stock shot up 7% in after-hours trading.”
