Disney+ is expected to fall tens of millions short of its last-stated subscriber target of 215 million to 245 million by 2024.
The report, based on unnamed Bloomberg sources, follows a series of decisions designed to fulfill CEO Bob Iger’s vow to make Disney’s direct-to-consumer business profitable by the end of this fiscal year, but have decreased pressure on Disney+ subscriber counts.
In 2020, just after the launch of Disney+, Disney announced a target of 260 million subscribers by the end of 2024. In August 2022, then-CEO Bob Chapek revised the target to 215 million to 245 million.
After returning to Disney to replace Chapek as CEO last November, Iger announced earlier this year that the company would focus on D2C profitability rather than subscriber growth, and would no longer offer subscriber forecasts.
Under Iger, Disney launched the ad-supported Disney+ tier in December 2022, simultaneously bumped up the ad-free tier’s price by $3 -- to $10.99, and announced another $3 price hike to kick in this October, bringing the price to $13.99.
Disney saved billions in costs by deciding in June 2022 not to outbid Disney+ Hotstar rivals for the rights to the Indian Premier League (IPL) cricket tournament. While Hotstar subscriptions are low-priced and low average cost per user (ARPU), the streamer has lost millions of subscribers in that region due to the lost IPL rights. Some analysts say reduced content on Disney+ due to the company's dropping some titles to save money has also contributed to a subscriber growth slowdown.
Disney+ added 800,000 mostly international subs in its fiscal third quarter to end with 146.1 million, but that was down from 157.8 million in April and 164.2 million in Q2 2022. The new advertising tier attracted 3.3 million signups between last December and August.
The good news, in terms of hitting Disney's priority of D2C profitability, was that fiscal Q3 D2C revenue rose 9%, to $5.5 billion, and the unit’s net losses were reduced by 52%, to $512 million, from $1.01 billion in the year-ago period.
Disney+’s subscriber totals should get a boost from Disney’s new distribution deal with Charter Communications, which includes a Disney+ with ads subscription for Spectrum cable subscribers, as well as from the still relatively new lower-cost ad-supported tier.
However, the drying up of the new-content pipeline expected to occur in coming months due to the writers’ and actors’ strikes could result in negative impacts on subscriber trends for streamers in general.