Disney+ lost more than 2.4 million subscribers in the last quarter of 2022
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Disney+ has lost subscribers for the first time since the streaming service launched in 2019.
Perhaps indicative of a now-oversaturated market, Disney+ saw a staggering 2.4 million subscribers leave in the final three months of 2022.
CEO Bob Iger issued a statement alongside the company finances, revealing the streaming service will now enter a phase of 'transformation'.
"After a solid first quarter, we are embarking on a significant transformation, one that will maximise the potential of our world-class creative teams and our unparalleled brands and franchises," Iger said.
The largest pain point for Disney+ came within their Hotstar service, a streaming option in India that is priced at a lower rate compared to other nations.
Hotstar saw a drop of 3.8 million accounts.
Disney+ also felt the pinch in North America, losing out on 200,000 subscribers in the US and Canada.
As a result, Disney will see USD$5.5 billion in cost cuts, with 7,000 jobs impacted all up.
"Since my return, I have dove down into every facet of the streaming business to determine how to achieve profitability and growth," Iger said.
"So with that goal in mind we will focus even more on our core brands and franchises which have consistently delivered high returns aggressively. Our general entertainment content will reassess all markets we have launched in and also determine the right balance between global and local content."
He added: "We will adjust our pricing strategy including a full examination of our promotional strategies. We will fine-tune our advertising initiatives on all streaming platforms."
CFO Christine McCarthy revealed that she was 'pleased' with the initial reaction to the newly added tier of Disney+ with ads, which debuted on December 8 in the US.
But she added that it will not yield a 'meaningful financial impact' until later in the company’s 2023 fiscal year.
Disney has estimated that its streaming service will have between 215 million and 245 million global subscribers by the time the service is five years old, in late 2024.
Despite their losses with Disney+, the Walt Disney company yielded strong results for their theme parks and experiences, cushioning the blow left by their streaming services.
Theme park revenues jumped a massive 21 per cent to $USD8.1 billion in the final quarter.
The total has exceeded analyst expectations by millions, with overall revenue coming in at USD$23.51 billion.