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Disney+ Lost 2.4 Million Subscribers in Q1: What Happened

Disney+ Hotstar got (cricket-)paddled in and around India after losing IPL digital rights.

NEW DELHI, INDIA-APRIL 17: Delhi Capitals Player, Shikhar Dhawan clicked during a training session ahead of the Indian Premier League 2019 (IPL T20) cricket match between Delhi Capitals and Mumbai Indians at Feroz Shah Kotla stadium, in New Delhi. (Photo by Pankaj Nangia/The India Today Group via Getty Images)

Delhi Capitals player Shikhar Dhawan training before a 2019 IPL match

The India Today Group via Getty

Disney+ lost 2.4 million subscribers in the final calendar quarter of 2022, which the company observes as its first fiscal quarter of the new year (in this case, 2023). While the loss took place outside of the U.S. and was not as bad as some analysts expected, it is still a harsh reality to see in black-and-white.

The company’s own previous guidance predicted modest “core” Disney+ growth, excluding India, where Disney+ Hotstar lost IPL cricket rights at auction. (Viacom18, a joint venture between competitor Paramount and India’s Reliance Industries, won the digital rights with a $2.62 billion bid; Disney Star got the linear-TV rights for $3.02 billion.)

Disney+ Hotstar, the version of Disney+ offered in India and parts of Southeast Asia, lost 3.8 million subs in fiscal Q1. All told, Disney+ (including Hotstar) ended calendar 2022 with 161.8 million subscribers.

Things went smoother stateside. In the U.S. and Canada, Disney+ gained 200,000 subs to reach 46.6 million. Hulu added 800,000 subscribers in the quarter (to reach 48 million); ESPN added 600,000 (to reach 24.9 million).

Disney’s direct-to-consumer revenue rose 13 percent in the quarter to reach $5.3 billion. The streaming business again lost more than $1 billion ($1.05 billion, to be exact). Disney still believes Disney+ will reach profitability in 2024.

The Walt Disney Company beat Wall Street’s top- and bottom-line financial forecasts, posting fiscal Q1 earnings of 99 cents per share on $23.51 billion in revenue. Media analysts projected the company would report earnings of 78 cents per share on $23.37 billion in revenue.

The October-to-December quarter featured a pair of big sequel films with the theatrical releases of “Black Panther: Wakanda Forever” and the mega-hit “Avatar: The Way of Water.”

A woman in a white dress, drape, and headdress, standing on a beach by day; still of actor Angela Bassett from "Black Panther: Wakanda Forever"

“Black Panther: Wakanda Forever”

Annette Brown/Courtesy of Marvel Studios

“After a solid first quarter, we are embarking on a significant transformation, one that will maximize the potential of our world-class creative teams and our unparalleled brands and franchises,” CEO-again Bob Iger said in a statement accompanying the financial disclosures. “We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges and deliver value for our shareholders.”

“Significant” is probably underselling Iger’s reorganization of Disney; another way to look at it is his complete dismantling of the Bob Chapek vision.

Disney+ ended the summer quarter (fiscal Q4 for them) with 164.2 million subs. With Hulu and ESPN+, Disney the company boasted a grand total 223 million global paid subscribers. That growth came at a big cost: the company’s DTC business lost $1.5 billion in its final (fiscal) quarter of 2022.

Just 12 days after reporting those figures, the Disney board of directors replaced Chapek with Iger — the very guy Parks guru Chapek took the reins from in 2020.

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