Disney+, the streaming service of the Walt Disney Company, reported a significant drop in its global subscriber base in the third quarter of 2023, mainly due to the loss of cricket rights in India. The service shed 11.7 million subscribers, falling from 157.8 million to 146.1 million, according to the company’s earnings report released on Tuesday. This is the third consecutive quarter of subscriber decline for Disney+, which had reached a peak of 164.2 million subscribers in the fourth quarter of 2022.
Cricket Rights Loss Hurts Disney+ Hotstar
The majority of the subscriber loss came from India, where Disney+ operates as Disney+ Hotstar, a combined platform that offers both Disney content and live sports. In March 2023, Disney+ Hotstar lost the rights to stream the Indian Premier League (IPL), the most popular cricket league in the country, to Viacom18, a joint venture of Viacom and India’s Reliance Industries. Viacom18 paid $2.6 billion for the five-year deal, outbidding Disney by a wide margin.
The IPL is a major draw for Indian viewers, who are avid fans of cricket. The league attracts millions of viewers every year, and has been a key driver of growth for Disney+ Hotstar, which had acquired the rights in 2018 for $2.55 billion. Without the IPL, Disney+ Hotstar saw its subscriber base plummet by 24%, from 52.9 million to 40.4 million, in the third quarter of 2023. This is the lowest number of subscribers for the service since its launch in 2019.
Disney CEO Bob Iger acknowledged the impact of losing the IPL on Disney+’s performance, but expressed confidence in the service’s long-term prospects in India. He said that Disney+ Hotstar still has a strong portfolio of content, including original shows, movies, and other sports such as Formula One and English Premier League. He also said that Disney is investing in creating more local content for India, as well as expanding its distribution partnerships with telecom operators and broadband providers.
Disney+ Faces Challenges in Other Markets
India was not the only market where Disney+ faced challenges in the third quarter of 2023. The service also lost 300,000 subscribers in the U.S. and Canada, where it now has 46 million subscribers. This is the second time that Disney+ has seen a decline in its core market, after losing 600,000 subscribers in the first quarter of 2023.
One of the reasons for the slowdown in North America is the increasing competition from other streaming services, such as Netflix, Warner Bros. Discovery, Paramount+, and Peacock. These services have been ramping up their content offerings and marketing efforts, as well as launching new features and bundles to attract and retain customers. For instance, Warner Bros. Discovery announced that it will release all its 2023 movies simultaneously on its streaming service and in theaters, while Paramount+ introduced a cheaper ad-supported tier and added live sports and news to its lineup.
Another reason for Disney+’s struggle in North America is the lack of new and compelling content on its platform. The service has been relying heavily on its flagship franchises, such as Marvel and Star Wars, to drive subscriber growth and engagement. However, these franchises have not been able to deliver consistent hits, as some of their recent shows and movies have received mixed reviews from critics and fans. For example, Black Widow, which was released on Disney+ with Premier Access for an additional $29.99 fee, was criticized for its weak plot and villain, and faced a lawsuit from its star Scarlett Johansson over breach of contract. Similarly, Loki, which was expected to be a blockbuster series for Disney+, failed to generate much buzz or excitement among viewers.
Disney is aware of the need to diversify its content slate and appeal to a wider audience. The company has announced several new projects and initiatives for its streaming service, such as:
- A reboot of Home Alone, titled Home Sweet Home Alone, which will premiere on Disney+ on November 12.
- A series adaptation of Percy Jackson and the Olympians, based on the popular book series by Rick Riordan.
- A collaboration with African entertainment company Kugali to produce an animated sci-fi series called Iwaju.
- A partnership with Sony Pictures Entertainment to bring Spider-Man and other Marvel movies to Disney+ after their theatrical and Netflix windows.
- A password-sharing crackdown that will limit the number of devices that can access a single account at a time.
Disney+ Remains Optimistic About Its Future
Despite the challenges and setbacks that Disney+ faced in the third quarter of 2023, the service remains optimistic about its future growth and profitability. The service still has a large and loyal fan base, especially among families and children, who enjoy its rich library of classic and original content. The service also has a global presence, with 100.1 million subscribers outside of North America, and plans to launch in more markets, such as South Korea, Taiwan, and Hong Kong, later this year.
Disney also reported that its streaming losses narrowed to $512 million in the third quarter of 2023, down from $1.06 billion a year ago. This was partly due to the cost-cutting measures that the company implemented, such as reducing its workforce and removing underperforming titles from its platform. The company also expects to benefit from the higher prices that it has introduced for its streaming service in some regions, such as Europe and Latin America.
Disney’s overall financial performance also improved in the third quarter of 2023, as the company reported a net income of $923 million, compared to a net loss of $4.72 billion a year ago. The company’s revenue increased by 45% to $17.02 billion, beating analysts’ expectations of $16.76 billion. The company’s recovery was driven by the reopening of its theme parks and resorts, which saw a surge in attendance and spending, as well as the strong performance of its film studios, which released several hit movies, such as Jungle Cruise, Cruella, and Free Guy.
Disney’s CEO Bob Iger expressed confidence in the company’s ability to overcome the challenges posed by the pandemic and the changing media landscape. He said that Disney has three core growth areas for the future: film studios, parks and resorts, and streaming. He also said that Disney has a unique advantage of creating synergy between these segments, as evidenced by the popularity of its franchises across different platforms and formats.