Disney+ lost 2.4 million subscribers in the last three months of 2022 and the entertainment giant announced it would cut 7,000 jobs.
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It’s the first time since the streaming service launched in late 2019 that Disney+ hasn’t gained millions of new viewers in the past quarter.
The platform now has 161.8 million subscribers worldwide.
In all, according to its quarterly results release published on Wednesday, the Disney group achieved a turnover of 23.5 billion dollars from October to December, better than expected by analysts.
The entertainment giant mainly reassured the markets with lower than expected operating losses for its streaming platforms (Disney +, ESPN + and Hulu), at $ 1 billion for the period from October to December.
But the group has also announced the upcoming loss of around 7,000 jobs.
“Although it is necessary to face the current difficulties, I do not take this decision lightly”, indicated Bob Iger, during a conference call.
According to its 2021 annual report, the group employed 190,000 people worldwide as of October 2 of that year, 80% of them full-time.
Its title took off 8% during electronic trading after the closing of the New York Stock Exchange.
“We believe the work we’re doing to transform our business around creativity, while reducing expenses, will drive sustainable growth and profitability for our streaming business,” Iger said. communicated.
Disney asked him in November to take over the position of general manager that he had left to Bob Chapek in 2020, after fifteen years in this position, in order to restore momentum to the company.
Champion of the family and polished image of Disney, he has since faced the problems of profitability of the platforms – in particular Disney + launched with great fanfare before his departure – but also a political showdown in Florida, where the one of the most visited Disney theme parks in the world.
Relations between Florida Governor Ron DeSantis and Disney soured after Bob Chapek spoke out publicly against a law promoted by the governor that bans teaching subjects related to sexual orientation in schools in Florida. primary.
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Streaming platforms experienced flamboyant growth for years, further amplified by the pandemic, before being caught up in the economic crisis.
“Subscriber growth will not be linear each quarter,” warned Christine McCarthy, Disney’s chief financial officer, in November, when the star platform had just gained 12 million subscribers in one quarter.
Netflix, the industry veteran and leader, had a tough first half of 2022 losing nearly 1.2 million subscribers, before bouncing back this fall and winter. The platform has more than 230 million paying subscribers, but its annual net profit fell 12% to 4.5 billion.
Streaming applications make the same observation as social networks like Snapchat, Facebook or Instagram: gains in users no longer automatically translate into financial gains.
Netflix and Disney therefore launched new, cheaper subscriptions in December, with advertising, to attract even more viewers and above all to diversify their sources of income.
Disney+’s costs $7.99 per month, while its basic ad-free subscription has risen to $10.99 in the US.
By the end of 2023, the new formula should bring in more than $1 billion in advertising revenue in the United States, according to figures from Insider Intelligence.