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· Posted on
February 21, 2024

Disney grows its streaming service but it's costing them a pretty penny and investors aren't too pleased

Disney+ saw massive subscription growth... but that also meant a massive loss for its streaming division.

What's the key learning?

  • Disney+ has grown to over 164 million subscribers since its launch, but aggressive growth and content production meant that its streaming division has lost $1.5 billion over the past 3 months.
  • While growth may have impressed investors in the past, this time around Disney's share price dropped 9%.
  • Investors in the media industry are increasingly prioritising media companies which are generating profits or approaching profit, so they are no longer focused on streaming subscription numbers by itself.

👉 Background: The Walt Disney Company aka Disney is the home of all things happiness for kids… and therefore, all things happiness for parents too. Think: Mickey Mouse and Goofy. Think: Frozen and Mulan. Think: Marvel and Star Wars franchises.

👉 What happened: Since launching Disney+ in November 2019, it has grown to over 164 million subscribers. But, aggressive growth and content production meant that Disney’s streaming division lost $1.5 billion over the past 3 months.

👉 What else: And while the growth may have impressed investors in the past, this time around its share price dropped 9%.

What's the key learning?

💡It’s 2022. And it’s all about profits over customer numbers. In other words, investors in the media industry are increasingly prioritising media companies which are generating profits… or approaching profit.

💡No longer are investors focused on streaming subscription numbers by itself. So Disney’s CEO promised that they are now on the ‘path to profitability’ for 2024. But to get there, Disney will need to raise prices and chuck ads into the service.

💡Disney’s streaming service ain’t the only ones. Netflix, Paramount and Warner Bros have all seen their share price drop after recent results.

‍

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