Disney Plus grows while Netflix suffers from churn rates
With about a million different streaming options nowadays, keeping the customer happy with content is priority number one. Disney knows this, and its quarterly report shows just how much the company continues to grow. Read more below.
The Mickey Mouse company added almost 8 million subscribers during Q1.
Disney’s had a very fruitful first quarter in 2022. Last Wednesday, the company announced that it’s added over 7.9 million new subscribers to its most popular streaming service – Disney Plus.
That brings the total of subscribers to 87 million globally. That is excluding over 50 million of customers subscribed to Disney Plus Hotstar in foreign waters.
According to the company’s numbers, the service now has over 7 million more subscribers than it did in the same period a year ago.
Disney also stated that all of its streaming offerings – like ESPN Plus and Hulu – had grown substantially during Q1. It’s currently sitting at more than 205 million users, an increase of 8.6 million since January.
That puts Disney Plus at a much better spot than Netflix, currently. In April, the streaming giant reported a loss of over 200,000 subscribers during the first quarter.
It was the company’s first substantial drop in over a decade. Disney Plus also had a faster growth than HBO Max, which had about 3 million new subscribers in Q1.
The HBO streaming service is currently at 77 million users. While Netflix’s numbers weren’t satisfactory, it’s worth noting that the company is still the most subscribed of its segment.
Currently, it holds about 222 million customers.
But it’s safe to say that all of the companies mentioned above are doing much better than CNN Plus. The streaming news website launched and folded within just a few weeks.
Disney Plus is still losing money
The company’s data reports that Disney Plus is earning more money per subscriber in the U.S. than it was before.
The monthly average revenue per user used to be around $6, and now is at $6.32. According to the company, it all has to do with a lower mix of wholesale users and a raise in retail prices.
However, Disney Plus is still causing Disney a lot of money loss, and more now than it was before. That is all due to much higher costs on advertising, technology, and of course, production.
When taking into consideration the amount of original content Disney Plus provides, and the quality of its shows, it’s safe to say those costs are very unlikely to go down.
The logical solution would be to take Netflix’s lead and raise its subscription prices. Yet, that could mean a large cut in its growth.
Therefore, to raise its revenue without impacting its customers, Disney is looking at a new ad-supported tier for their Disney Plus streaming service.
Another interesting observation is that Disney says they gained revenue despite the fact that they gave up close to a billion dollars to terminate one of its customers license agreements.
The customer had to give up the rights to distribute film and television content early on so Disney Plus could display the content exclusively.
Even though the report fails to specify which customer it was, many media outlets speculate that it could be Netflix.
That is because the company had to take off all of its Marvel shows, which were then moved to Disney Plus.
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