Disney’s CEO Bob Iger anticipates that a move to crackdown on password sharing will result in an increase in subscribers. Additionally, he highlights that sequels are economically favorable due to reduced marketing expenses.
Boss Bob Iger says sequels are cheaper to make because they save on marketing costs.
Disney is relying on a crackdown on password sharing and a series of sequels as it aims to turn its streaming business profitable. Despite facing challenges from shifting audience preferences away from traditional pay-TV and theaters, the company remains optimistic about meeting its targets, thanks to a surge in new subscribers and price adjustments that have helped narrow losses in its streaming division.
Between January and March, Disney+ saw a global increase of over six million subscribers, excluding India, bringing its total subscriber count to over 117 million. This growth is crucial for Disney’s future, particularly as it has experienced slowing growth in recent months.
Despite these positive developments, Disney’s stock price experienced an 8% drop, reflecting investor caution regarding its future performance.
Disney has outlined plans for a password crackdown initiative set to commence in some regions this summer and roll out globally by September, anticipating that this measure will drive further subscriber growth.
Additionally, the company is banking on several sequels to attract audiences both to its streaming platform and to cinemas. Sequels for popular titles like Moana, Inside Out, Planet of the Apes, and Deadpool are in the pipeline.
Disney CEO Bob Iger, who was brought out of retirement in 2022 to enhance profitability and investor confidence, acknowledged a strategic shift towards prioritizing sequels, citing their familiarity and lower marketing costs as advantages in a competitive market.
While emphasizing the importance of maintaining a balance between sequels and new original content, Iger hinted at scaling back on Marvel productions to focus on ensuring higher quality across the board.
Disney’s diversified business portfolio, encompassing news networks, sports-oriented ESPN, theme parks, and cruise lines alongside its film and television studios, has faced challenges amid industry transformations.
Despite facing criticism from investment groups for its perceived sluggish response to industry changes, Disney, under Iger’s leadership, remains committed to adapting to the evolving entertainment landscape.
In the latest quarter, Disney’s traditional television business witnessed an 8% decline in revenues due to subscriber cancellations and reduced advertising. However, Mr. Iger expressed optimism about the effectiveness of his turnaround strategy, highlighting Disney+’s operating profit of $47 million compared to a loss of $587 million in the same period last year.
The streaming segment, including ESPN+ and Hulu, narrowed its operating losses from $659 million to $18 million. This shift towards profitability in the streaming sector is seen as a significant milestone for Disney and the industry overall, according to Mike Proulx, research director at Forrester. Disney’s experiences division, encompassing theme parks and cruise lines, saw a 10% revenue increase.
While the company cautioned about signs of travel moderation post-Covid, it expects growth to rebound later in the year. Overall revenue edged up by approximately 1% to $22.1 billion. However, the company reported an overall loss of $20 million, impacted by a $2 billion charge related to its merger deal in India, where it faced challenges due to the loss of key cricket broadcasting rights.
They’ve decided to crack down on password sharing for their streaming service. And you might be surprised to hear that this decision is actually expected to increase their subscriber base. How? Well, by encouraging households to sign up for their own accounts, Disney is aiming to bring in more revenue and reduce account abuse. This move is part of a larger effort by streaming platforms to maximize their potential audience and revenue. While some people might be bummed about not being able to share passwords anymore, there’s no denying that Disney’s strategy is a smart business move. What do you think about this? Let’s hear your thoughts in the comments!
Read More: Netflix password crackdown fuels sign-up surge
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