Disney+ Revises Streaming Subscriber Target

As Wall Street cools on scale as a primary metric for investors to judge Hollywood’s streaming race, Disney is revising its ambitious forecast for subscriber additions on its flagship platform.

The company has separated its streaming guidance and now expects to hit 135 million to 165 million Disney+ subscribers by 2024. And it additionally expects Disney+ Hotstar subscribers to reach up to 80 million subscribers by the same year. The revised forecast arrives as Disney’s direct-to-consumer streaming division disclosed a quarterly loss of $1.06 billion.

In its most recent quarter, Disney added 14.4 million subscribers to hit 152 million total global subscribers, but that figure also includes Disney+ Hotstar, which is now being separated out in guidance. Without Hotstar, Disney+ currently has 93.6 million subscribers as of July 2 — meaning that Disney+ is hoping to add between 40 million and 70 million subscribers to what’s being called its “core” offering by the end of fiscal 2024.

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The Hollywood giant had previously set a goal of about 230 million to 260 million subscribers to Disney+ and Disney+ Hotstar by fiscal 2024 and that the streaming platform would be profitable by that year. As recently as May, CFO Christine McCarthy said on an earnings call that the company is “confident in our long term subscriber guidance” of that projection.

One big reason why Disney altered its target: customers in India. The company’s Disney+ Hotstar, which operates in India, Southeast Asia and other markets, had held the streaming rights to India’s most popular sport, Indian Premier League Cricket, for the past several years after inheriting the rights after it closed on Rupert Murdoch’s 21st Century Fox assets in 2019. When streaming rights went up for auction this year, Disney wasn’t the winner (they went to Viacom18 for $2.6 billion). “We chose not to proceed with the digital rights given the price required to secure that package,” stated Disney international chief Rebecca Campbell in June. As such, Disney+ Hotstar isn’t expected to retain many of the millions of streaming customers who subscribed for cricket.

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Disney said it will spend up to $32 billion on entertainment content this year — trimmed from $33 billion — with about a third of that figure devoted to sports programming across platforms. (In contrast, Netflix is expected to spend around $17 billion on content annually the next couple of years.) And the company is launching its advertising-supported tier of Disney+ in December, at a price of $8 a month, while the ad-free version of the service will see a price hike to $11 a month.

A drive for streaming profits has also recently animated Hollywood execs this earnings season, spurred by Netflix’s July 19 disclosure that it had lost 970,000 subscribers — which was good news for the company, since top execs had expected a hit of 2 million. With 220.6 million global subscribers, Netflix CFO Spencer Neumann described on an earnings call the process of “moderating our growth in content expense” in order to adjust “for the growth in our revenue.”

When Paramount disclosed its latest results on Aug. 4, the Bob Bakish-led company touted nearly 64 million combined subscribers to services like Showtime and Paramount+ globally, although leadership said streaming losses would hit $1.8 billion for the year rather than prior guidance of $1.5 billion.

Meanwhile, Comcast’s NBCUniversal division reported on July 28 that paid subscribers to streamer Peacock had stalled at 13 million and the company saw a streaming loss of $467 million in the quarter, up from $363 million in the same quarter last year.

And Warner Bros. Discovery’s team may have had the most blunt quotes about looking beyond streaming to other revenue sources as the firm logged 92.1 million streaming subs to HBO Max, HBO and Discovery+. The company, which is looking to combine its streaming services, is aiming for 130 million subscribers by 2025. Amid a drive to find $3 billion in cost-savings, and balance debt obligations, WBD chief David Zaslav added on an Aug. 4 earnings call: “We’re not in the business of trying to pick up every sub, we want to get paid.”

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