How Disney lost more than 12 million Subscribers and nearly $400 million in Four Months by trying to copy arch-rival Netflix
🔷 Netflix gained over 13 million new subscribers in 2023 after introducing price hikes and clamping down on password sharing.
🔷 Disney followed in Netflix's footsteps, hiking the price of its ad-free subscriptions on Disney+ and Hulu.
🔷 Disney's plan backfired, failing miserably as it lost its highest number of subscribers ever in a single quarter of a year.
Disney announced record subscribers of over 220 million, making it the world's fastest-growing streaming platform in 2022. However, 12 months after toppling arch-rival Netflix to become the world's biggest streaming service, Disney is languishing in a financial crisis.
In May 2023, Disney's biggest rival, Netflix, announced price hikes in the U.S., the UK, Canada, and France.
The streaming service also introduced a robust plan to clamp down on password sharing to attract more subscribers amid stagnated growth in the first quarter of the year. Netflix had initially tweeted on X (formerly known as Twitter): "Love is sharing a password."
Despite the backlash on social media, Netflix implemented the password-sharing crackdown and the results were off to a flying start in the U.S.
According to Antenna, a data analytics firm that measures data by tracking purchases and transaction data, Netflix recorded "the four single largest days of US user acquisition" in the first week of its controversial price hikes.
Antenna said Netflix saw a surge in daily sign-ups, with almost 100,000 new subscriptions between May 26 and May 27, eclipsing previous spikes observed during the COVID-19 lockdowns in early 2020.
Although cancellations also increased, the difference was not as much as sign-ups, at a 25.6% sign-up increment compared to the prior 60-day period.
Netflix also announced a world record of over 260 million subscribers, gaining more than 13 million new subscribers in Q4 of 2023, according to CNN.
Disney followed in Netflix's footsteps in October 2023 and announced plans to transition its business to a new streaming age. Disney hiked the prices for its ad-free leading subscriptions in the U.S. as the price of Disney+ went up from $10.99 a month to $13.99 per month. Hulu's ad-free package surged from $14.99 to $17.99 monthly.
There is little doubt Disney had good intentions to keep up pace with Netflix when it introduced price hikes and clamped down on password sharing but unlike Netflix's plan, Disney's transition backfired.
Disney+ reported streaming losses of over 12.5 million paying subscribers worldwide in Q4 (October through December) of 2023, with the U.S. and Canada accounting for most of its losses. This was Disney's largest quarterly loss of subscribers in a year since its streaming ventures launched in 2019.
The streaming venture also lost $387 million in that quarter, which was slightly lower than the reported $512 million losses in Q3 of 2023. However, it only lost 11.7 million subscribers in that quarter.
The streaming giant Disney had reported a streaming loss of $659 million but only four million subscribers in Q2 of 2023 and in Q1 of the same year, reported losses of a whopping $1.1 billion with 2.4 million subscribers.
Disney's misfortunes coincided with Netflix's gains in that same period following the latter's announcement of more than 13 million new subscribers for Q4 of 2023.
The predicament raised questions regarding whether Netflix might've benefitted unfairly from Disney's mishaps.
Some fans took to social media to allege that Netflix might've misled Disney by introducing price hikes and cracking down on password sharing, especially as this coincided with the launch of the writers and SAG-AFTRA strikes.
During the strikes, Hollywood was shut down for months, with Disney unable to advance on new and existing projects while Netflix remained the leading subscriber, churning out international content worldwide.
Meanwhile, other fans accused Disney of being "woke" as its post-pandemic era content fell out of touch with audiences, as the streaming giant Disney splashed more than $1 billion on four of 2023's biggest flops, headlined by The Little Mermaid starring Halle Bailey.
This story had been written at an earlier date is only being published now.
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About The Author:
Ini-Iso Adiankpo is a Creative Writer and Freelancer with half a decade's experience covering entertainment news that matter to users and businesses.
In addition to the UK edutainment website Kidadl, his work can be found on Medium's Cinemania and Counter Arts. With a focus on movies, TV shows, and media corporations, Ini-Iso Adiankpo reports on breaking news, opinions, reviews, and trending topics.
He is also a former mentee at Impaakt, a research platform that promotes Earth's sustainability by measuring companies' social and environmental impacts. Ini-Iso Adiankpo is a massive fan of tennis and can be reached at iniisochristopher.tbs@gmail.com.
