This may surprise many as Disney+, and Paramount+ are extremely popular, but both services are still not profitable. Disney+ currently has about 161 million subscribers as of the 1st quarter of 2023. Paramount+ has about 60 million subscribers as of the 1st quarter of 2023.
These services are not alone as most cord cutting services are reportedly not profitable as they struggle with low ad revenues and competition.
Now Disney is telling investors that it expects Disney+ to be profitable in September 2024, according to a Wall Street Journal report. In total, Disney has lost more than $10 billion on its streaming services since it started reporting numbers in 2019.
Exactly how Disney plans to become profitable in September 2024 is unknown right now though Disney has given us some hints. Recently Disney announced that it will cut back on the amount of new original content it will be making to help cut costs. Also, Disney has hinted at future price hikes.
During Disney’s 2nd quarter 2023 earnings call, Disney said that the price of the Disney+ would be going up sometime this year but stopped short of announcing what the new price would be or when the price change would happen.
This is not the first time that Disney has said the price of Disney+ is going up. In March Bob Iger, the CEO of Disney, gave a talk at the 2023 Morgan Stanley Technology. During that event, he talked about Disney+’s pricing and Disney’s thoughts on Hulu.
When asked about Disney+ and its pricing strategy Bob Iger said, “in our zeal to grow global subs, I think we were off in terms of our pricing strategy, and we’re now starting to learn more about it and to adjust accordingly.” He went on to say that Disney+ needs a “pricing strategy that makes sense.”
Bob Iger also went on to say that Disney needed to justify better what it spends on content vs what it was making. In short, Bob Iger said, “we have to better rationalize our costs” and “obviously, we have to attract more subs.” This was once again talked about during Disney’s earnings call this week as Disney said they will again cut the amount of content Disney is making for its streaming service.
The truth is for many services, 2023 and 2024 may be make-it-or-break-it years, especially for services that don’t have large backers. So how many services will still be around at the end of 2024 is anyone’s guess, but it’s a safe bet that some won’t make it.