Disney's third-quarter 2023 financial results have unveiled a complex landscape for the entertainment conglomerate.
Despite the company's ongoing struggles with streaming services and substantial restructuring costs stemming from content removal, Disney's recent quarter has been marked by mixed outcomes.
Subscriber losses remain a significant concern, with Disney+ subscribers witnessing a 7.4% drop from the prior quarter, totaling 146.1 million, a figure that surpassed Wall Street's negative projections.
This decline was heavily impacted by Disney+ Hotstar in India, which experienced a 24% user reduction after losing rights to Indian Premier League cricket matches.
Disney plans to counter this by raising prices for its ad-free streaming service in the US and will launch Disney+ with advertisements in Canada, the UK and Europe in November.
There was a bright spot amidst media and entertainment distribution challenges for Disney, however. The company’s parks, experiences, and products division exhibited a 13% revenue rise to $8.3 billion. While international parks excelled, domestic locations, particularly Walt Disney World in Florida, experienced attendance and revenue dips.
“Disney's mixed results will do little to calm investors anxious for clarity on the company's strategy for its streaming services and TV networks. While it's encouraging that Disney narrowed its streaming losses in the past quarter, it did so mostly through massive reductions in workforce and content spending, rather than through organic growth,” said Paul Verna, principal analyst at Insider Intelligence.
“On the traditional TV side, losses continue to mount as CEO Bob Iger looks to offload what he now considers non-core assets, including the ABC Network. These adverse trends are compounded by economic uncertainty, a soft ad market, increased competition in streaming media, labor disputes with screenwriters and actors, and lackluster box office numbers for Disney's films."
In addition, Disney's exploration of artificial intelligence (AI) has drawn attention. The company's creation of an AI task force, despite ongoing debates over AI's impact in Hollywood, aims to apply AI across various segments, from theme parks to advertising. The move is accompanied by 11 job openings seeking AI expertise.
In the metaverse arena, Disney experienced a rollercoaster journey. Initially, it announced metaverse-focused strategies within its storytelling and consumer experiences unit.
However, the departure of Michael White, the face of this division, accompanied Disney's broader restructuring process, which saw the division's entire team laid off.