As the streaming wars intensifies with Netflix far ahead in terms of subscriber growth, and Warner Bros. Discovery set to launch its Max service in Australia this year, Walt Disney has now warned of a modest decline in Disney+ streaming subscribers in the coming quarter.
Subscribers for the company’s flagship streaming video service, Disney+, decreased 1% in its first fiscal quarter compared to the prior quarter to 124.6 million.
The company said it expected a modest drop in subscribers because of a price increase that took effect in October. It forecasts a decline in Disney+ subscribers in the second quarter, compared to the first.
Since its introduction in 2019, the Disney+ monthly subscription has risen by A$4 per month in Australia, and its annual plan has been increased by A$50.
The last increase saw the service rise from A$11.99 per month to A$13.99 per month. The Premium tier costs A$17.99 per month and A$179.99 annually.
Disney Chief Executive Officer Bob Iger said on a conference call with investors that the company was pleased with the numbers of subscriptions to Disney+ and Hulu, as it had expected a “significantly higher” number of account closures after raising prices.
Later this year, Disney intends to roll out a direct-to-consumer ESPN Flagship product that would offer TV programming available on the sports network as well as additional content.
Iger appeared to reference rival Netflix’s entry into live sports during the investor call saying ESPN provides sports fans with programming “365 days a year, 24 hours a day.”
“So if you’re a sports fan, it’s not about one day of one boxing event or one day of football,” said Iger. “It’s about sports every single day of the year and every hour of the day. And that’s a pretty compelling…consumer proposition.”
Disney said this week that its first fiscal quarter showed revenue in the period ended December 28 increasing 5% to $24.7 billion (A$39.31 billion).
The improved performances of Disney’s streaming operation and film studio led to a 31% gain in operating income for the quarter.
The period also marked the third straight quarter of streaming profitability for Disney, aided by the introduction of an ad-supported tier, increased subscription prices and a crackdown on password sharing.
The division that includes Disney’s film studio delivered earnings of $312 million (A$496.55 million), also reversing a year-ago loss, driven by Moana 2. The animated feature opened on November 27 and generated $1.04 billion (A$1.66 billion) in global box-office sales.
Moana 2 opened to $1.76 million at the Australian box office, making it the highest-grossing Walt Disney Animation Studios opening day film of all time.
In contrast to Disney’s streaming performance, market leader Netflix that it added 18.9 million customers in the fourth quarter, taking its global number of subscribers to more than 300 million.
Warner Bros. Discovery which is launching its Max in Australia in the first half of this year, added 7.2 million net streaming subscribers in the three months ended September 30. Apart from Oz, it will also launch in more than a dozen markets this year.
