As of October 1, the three main streaming services of Disney, including Disney+, ESPN+, and Hulu, have increased their subscribers to more than 235 million. This is above its rival Netflix's 223 million subscribers, as per Engadget.
On Tuesday, the company reported its latest quarterly results. Based on the results, Disney+ welcomed 12.1 million new subscribers in the most recent quarter. Meanwhile, ESPN+ added seven million customers, and Hulu reported additional 3.4 million new accounts, as per CBS News.
Disney+ to Bring Ad-Supported Tier in December
Disney+ has 164 million subscribers, which is yet to reach Netflix's numbers. While the streaming platform alone cannot beat Netflix when it comes to the number of subscribers, all three of Disney's streaming services can bring down the streaming giant.
The two streaming giants are engaged in a battle for viewers. Likewise, both companies are working on lower-priced ad-supported tiers as part of their competition for cost-conscious customers.
This month, Netflix already debuted its ad-supported network. On the other hand, Disney+ is planning to roll out its own version of the said feature on December 8.
According to Jamie Lumley, an analyst at the global research firm Third Bridge, the ad-supported tier of Disney+ will be a game changer for its subscribers as well as for its revenue growth.
Another issue to factor in is the kind of content that Disney produces since most of its customers are subscribed to the platform for "family-friendly features and franchises."
Lumley said that one of the issues the streaming platform has to face is whether Disney+ will choose to expand to more adult-focused entertainment.
Moreover, another concern is how the streaming platform will approach this without greatly impacting its traditional brand.
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Disney is Experiencing an Increase in Operating Loss for Streaming
Despite the impressive growth in the number of subscribers, an increase in the operating loss for streaming Disney was observed, according to Engadget.
The operating loss of the streaming platform increased from $0.8 billion to $1.5 billion for the quarter.
Within the period, Disney+ experienced more losses because of higher production as well as technology costs. Another contributory factor is the increase in marketing expenses.
Another reason for the losses is the lack of Premier Access releases for the quarter, unlike last year when the streaming platform released Black Widow and Jungle Cruise.
To offset the losses, Disney has to employ higher subscription costs. This is expected to become even higher in December.
Despite the losses in the recent quarter, the company is expecting that its streaming losses will narrow down moving forward, according to Walt Disney CEO Bob Chapek.
The CEO said that they expect to narrow it down through price increases along with the launch of the ad-supported tier on Disney+.
The company believes that Disney+ is right on track to attaining profitability in the fiscal year of 2024, considering that there will be no "meaningful shift in the economic climate."
This coming December, Disney is planning to raise its streaming prices across the board. The ad-supported tier is also coming for Disney+ next month for $11 a month.
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