Disney copies the 'Netflix manual' to make its streaming profitable in 2024
A price increase in the United States and the United Kingdom, the launch in Europe of a subscription with ads and the study of a way to limit the shared accounts that use its platform. However, the announcements were not made by any executive from the Los Gatos platform, but by Bob Iger, CEO of Disney, who explained on Wednesday the new guidelines that the company will apply to straighten out its streaming business..
The goal of the company founded by Walt Disney for its 'direct-to-consumer' business (which also includes ESPN+ and the independent Disney+ business in India) is to put losses behind by 2024 and start turning a profit. Time is pressing for the company, since Netflix chains quarter after quarter in 'black numbers' and has also managed to increase its user base by almost six million accounts after the extension of its shared account limitation program. It also seems that HBO Max has joined the wagon of benefits, the platform -which is in full remodeling to be called just Max-. It barely lost three million dollars between April and June, despite leaving 1.8 million consumers behind after the end of The Last of Us and Succession.
On a positive path, the Disney service halved its losses in the same period, but these continue to amount to 512 million dollars (465 million euros in exchange), although, within the framework of the fiscal year, the reduction is much more modest: with a reduction in losses of 12.5%. As with HBO Max, the firm has also not been able to incorporate a significant cohort of new users and has barely added 800,000 customers in the last three months, with a drop of 300,000 in the United States, its main market, figures similar to those that Paramount + added.
CHALLENGES FOR THE SECTOR
After the last 12 months of frenzy in the sector, with changes in leadership, strategies or even the names of the platforms, the second half of 2023 is not expected to be much calmer.. In the first place, the landing of streaming platforms in the world of advertising comes at a time of macroeconomic uncertainty that makes it difficult to guess how advertiser spending will evolve in general terms..
In addition, for platforms to become an attractive destination for advertising promotion, they need to fatten their user base and content is a key element there.. For this reason, all the managers have underlined during their interventions the need to reach an agreement with the scriptwriters and with the actors as soon as possible to prevent the closures from being prolonged and affecting the catalogs and forecasts of studios and platforms more than what is already They are doing. From Netflix, HBO or Disney it is maintained that the series and films scheduled for the second half of the year will not suffer major changes to their scheduled dates, but starting next year the situation will not be the same.
On the other hand, the strikes and the stoppage in filming is translating into savings (temporary, yes) for the platforms, which is increasing the cash flow of the companies and helping them to materialize their cost reduction objectives. In this sense, Warner Bros. has been the most transparent, pointing out that in the last quarter it saved around 100 million dollars due to the slowdown in the industry.