Shares of the Walt Disney Company fell in trading last night (Thursday) by almost 9%, after the company reported a weak addition of subscribers to the Disney+ streaming service during the last quarter.
The company, which recorded revenues and profits for the period that were in line with Wall Street expectations, reported the loss of four million Disney+ subscribers. This decrease was offset by price increases, which led to the reduction of operating losses in the streaming unit by $400 million in the second fiscal quarter.
The company’s shares closed Thursday at around $92 per share, about 6% higher than where it started 2023.
Disney will continue to face intense streaming competition with the other giants in the field such as Netflix, Apple TV+ and Amazon Prime. The new wave may actually bring with it a discount on television services, with the possibility of a discounted subscription with advertisements.
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Paul Varna, principal analyst at research firm Insider Intelligence, wrote: “While Disney has been able to stem its revenue losses, mainly by raising prices, this strategy is not sustainable in the long term. Disney plans to raise prices again later this year, but the margin for further increases will soon run out “.
Disney CEO Bob Iger is leading a restructuring of the company, which includes layoffs of about 7,000 workers, which are scheduled to be completed before the summer.
Shares of other streaming services from movie giants such as Discovery, Warner Bros. and Paramount also fell yesterday, down about 4% each. Netflix rose by about 2.6%.
