With 221 million streaming subscribers, Disney+ has overtaken Netflix in the race for subscribers. According to Reuters, the streaming giant announced yesterday that its total subscriptions had reached 152.1 million at the end of Q2, exceeding the 147 million mark predicted by analysts.
The company also announced that it added 14.4 million Disney+ customers, beating the expected 10 million additions in July. Now, the company has a total of 221 million subscribers- combined with Hulu and ESPN+ (Hulu has 46.2 million subscribers and ESPN+, 22.8 million).
With this, Disney has surpassed Netflix which has 220 million subscribers as of the last count. This just demonstrates how volatile the game in the streaming market is.
Consequently, the new streaming giant has also announced a 38% increase in the monthly subscription price for Disney+ users, giving them access to the platform without advertisements. In addition, Hulu’s prices are expected to rise by $1-$2 per month, depending on the plan, beginning in December.
The streaming war
The streaming landscape is changing. Entrants like Disney+ and HBO Max sport their own compelling services, the development could force the company to adopt some of the revenue streams that have made the traditional media companies successful for decades: theatrical distribution, advertising-supported subscription services and perhaps consumer products.
It is no surprise that media companies are now putting more emphasis on online streaming than on cable properties; the future of media seems to be completely obvious in that regard, as the latter has managed to garner a larger audience over time and the number continues to grow.
The world’s first video-on-demand service was launched by Hong Kong Telecom (HKT) in China, but the project failed partly due to major technical issues. Netflix, on the other hand, has been a huge success.
Starting as a small DVD rental company, Netflix has grown to become one of the world’s largest TV and movie studios, with more subscribers now.
As the online streaming platform grew in popularity, other companies began to enter the streaming market. In 2017, Disney started to build a streaming service to rival Netflix as audiences moved to online viewing from traditional cable and broadcast television.
Consequently, Disney stopped showing its movies on Netflix as it launched its own streaming platform, Disney+. It attained ESPN+ and in 2019, Disney entered into an agreement with Comcast, the parent company of NBC Universal, to acquire a 33% stake in the Hulu platform.
Rival Amazon launched an internet video service (Amazon Unbox) in 2006 but added the benefit of “unlimited, commercial-free instant streaming of more than 5,000 movies and TV shows” to paying Prime members in February 2011.
Netflix’s loss, Disney’s gain
“Disney is gaining market share when Netflix is struggling to add more subscribers. “Disney has still more room to grow in international markets where it’s rolling out its service fast and adding new customers.”– Investing.com analyst Haris Anwar
While others are balancing growing their subscribers, Netflix is struggling with retaining the subscribers it has. In May this year, Netflix laid down over 150 employees as their revenue and subscriber numbers dropped. This was a massive hit on the company’s culture and status as a high-performing brand.
For the first time in a decade, it disclosed a sharp reduction in subscribers in the first quarter of 2022, with a net loss of 200,000 streaming clients. The business also forecasted a 2 million subscriber drop in the second quarter. With various strategies in place, the “king of streaming services” is seeking to regain its leading position and gain the lead.
In contrast, Disney appears to be gaining market share, expanding internationally, acquiring new customers, and rolling out new services. In after-hours trading on Wednesday, Disney shares rose 6.9% to $120.15. According to Reuters, its overall revenue increased from the previous year to $21.5 billion, exceeding the analyst consensus of $20.96 billion.
Disney’s Chief Financial Officer Christine McCarthy expects the company to add up to 80 million Disney+ Hotstar customers by September 2024, as well as between 135 million and 165 million others. McCarthy stated that the company still expects its streaming TV unit to turn a profit in fiscal 2024.
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