Unpacking Disney+’s Downfall: Lessons Learned and Paths Forward
By Movieguide® Contributor
When Disney+ launched in 2019, it started as a favorable endeavor. Now, the company’s overzealousness in pushing content may be its downfall.
In the COVID-19 pandemic, “As subscriber numbers soared far beyond Disney’s forecasts, the Mouse got drunk on its own success and ploughed billions of Dollars into exclusive Disney+ content,” Forbes said on April 7. “By the time it was released, there was a vaccine for Covid-19 and the pandemic had receded.”
“Consumers were left picking up the tab for blockbuster furlough payments creating a global cost of living crisis that endures to this day,” Forbes wrote. “It led to people cutting their streaming subscriptions and left Disney with a loss-making platform.”
The company cut costs by $7.5 billion to satisfy stockholders, and Disney+ has incurred over $11.4 billion in losses since its start.
It “isn’t forecast to even make a profit until the end of the year. It would have been so easy to prevent this from happening,” Forbes says.
In 2022, Disney spent $33 billion on Disney+ content in an effort to compete with Netflix. The company’s plan failed.
“Pretty much everything that could go wrong for Disney did go wrong. Taxes soared as governments sought to claw back the massive furlough payments made during the pandemic,” Forbes said. “At the same time, inflation surged due to the war in Ukraine and local factors such as Brexit in the United Kingdom.”
“Meanwhile, consumers were still wary of returning to cinemas due to the risk of catching covid. However, they weren’t stuck indoors any more so they had less of a need for streaming subscriptions and less money to pay for them,” Forbes continued.
Disney+ subscribers dropped from 164.2 million in September 2022 to 149.6 million by the end of 2023. Meanwhile, Netflix boasts 260 million. Disney’s stocks also dropped by 40%.
Movieguide® reported on March 11:
In the last four months of 2023, Disney+ lost 1.3 million “core” subscribers.
“According to the information in the [2024 Q1 earnings] call, Disney+ went from 112.6 million subscribers in September 2023 down to 111.3 million in December 2023,” Early Game wrote. “This comes after Disney introduced new subscription prices, with the ad-free tier increasing its price from $10.99/month to $13.99/month in October 2023.”
The Q1 report notes that the end of its global summer promotion also impacted the dip in subscribers. And Disney didn’t earn more than it did in the prior year’s quarter.
Current Disney CEO Bob Iger is well aware of the company’s mistakes.
“We ended up losing a lot of money on [streaming], more so than we expected initially,” he said. “Part of that was because we were chasing sub growth and not as focused as we needed to be on the bottom line. I came back and the losses were around $4 billion a year. It was clear that that was not sustainable and not acceptable and the goal was first let’s reduce those losses.”
Now, the company has cut down on its content and enabled some of it, like the WILLOW series, to be licensed to other platforms.
“We need the technological tools to lower churn and create more stickiness. It’s things like recommendation engines, getting to know our customers better. We need to reduce the cost of marketing. We need to reduce the cost of customer acquisition to get the margins up,” Iger said in early April.
In addition to revamping its streaming service, the company will draw more viewers if it returns to creating the wholesome, family-friendly content that made it so successful in the first place.
Movieguide® previously reported that Disney has struggled at the box office in recent years because it injected immoral agendas into its movies:
After Walt Disney Animation Studios’ STRANGE WORLD and Disney Pixar’s LIGHTYEAR failed to draw expected numbers at the box office, many fans wondered how the one-time undisputed leader in animated family films could fall so far, so fast.
STRANGE WORLD earned just over $25M despite its estimated $180M budget, while the TOY STORY spinoff failed to impress with only a $50M opening weekend and a slew of negative reviews from mainstream outlets.
The one consistency between the two movies? Their focus on a progressive agenda over a creative story, uplifting and moral lessons, and compelling characters.
Disney+ has also highlighted LGBT content, added R-rated movies and greenlit a series following a love story between a teenage girl and the devil—all actions that have distanced the company from its family-oriented audience.
Iger, however, says the focus on agenda over entertainment is going to change.
“I’ve always believed that we have a responsibility to do good in the world, but we know our job is not to advance any kind of agenda,” he said during an April 3 shareholder meeting. “For as long as I’m in the job, I’m going to continue to be guided by a sense of decency and respect, and we’ll always trust our instincts.”
“Our job is to entertain first and foremost, and by telling great stories, we continue to have a positive impact on the world and inspire future generations, just as we’ve done for over 100 years,” he continued.
Hopefully, Iger and Disney will follow through on this commitment and reject the immoral content that has cost them millions.
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