The Walt Disney Company has recently revealed their financial quarter results that showed a steep decline in revenues. The company has reported a surprise 7-per-cent reduction in revenues as well as a loss of 4 million subscribers on their platform.
The Disney+ service has experienced a significant decline in subscriber numbers, whereas ESPN+ has experienced an increase of 400,000 subscribers, reaching a total of 25.3 million.
As part of Disney Media and Entertainment Distribution's posted report for the second quarter ending 1st April 2023, earnings for the linear networks of Disney Media and Entertainment Distribution declined from $7.1 billion to $6.6 billion.
Disney will cut content and increase subscription fees
Disney has revised its financial plans following the results of the second quarter in order to make a comeback and recently called emergency investor meetings in order to improve the situation at the Disney+ streaming service.
Despite the fact that Disney+ as well as its other two services ESPN+ and Hulu managed to reduce their losses by $229 million compared to last year, a lack of growth in subscribers is not the right signal. As a result, Disney+ will now focus on squeezing out the content on its platform to provide quality over quantity.
Disney CEO Bob Iger revealed:
"It's critical we rationalize the volume of content we're creating and what we're spending to produce our content,"
In addition, Iger stated that Disney would also increase its advertising in order to cover up losses. He stated:
"We have only just begun to scratch the surface of what we can do with advertising on Disney+, and I'm incredibly bullish on our longer-term advertising positioning,"
Among the changes Disney will make to their creative strategy, Bob Iger also revealed that they will be revamping their financial structure in the near future. Bob Iger said that Disney will likely increase subscription fees to "better reflect the value of our content offerings.".
Bob Iger also said that it was important for the company to be careful not to lose subscribers as a result of the new financial model. He said:
"And now as we grow the business in terms of the global footprint, we realized that we made a lot of content that is not necessarily driving sub growth," Iger said. "And we're getting much more surgical about what it is we make. So as we look to reduce content spend, we're looking to reduce it in a way that should not have any impact at all on subs."
The latest financial numbers from Disney have undoubtedly convinced them that it is imperative that they re-strategize their creative vision in order to ensure a financially sustainable approach to their business.
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