This may surprise many, especially because Disney+ and Paramount+ are extremely popular, but both services still are not profitable. As of the third quarter of 2023, Disney+ has about 150 million subscribers and Paramount+ has about 63 million subscribers.
The problems are the high subscriber acquisition and content costs. Both Disney and Paramount are spending big to get new subscribers and add content. Adding in high start-up service costs, staffing, and other costs means both services are still not profitable.
In 2023, both Paramount and Disney+ made moves to help address these issues. First, we saw price hikes on both services. More importantly, Disney and Paramount removed programs from their platforms to cut down on content costs.
It’s reported that Disney+ hopes to be profitable in the third quarter of 2024. It’s also hoped that Paramount+ will be profitable in 2024 or 2025.
What is clear is that most streaming services right now are not profitable. Even large well-known streaming services still are not profitable in 2024. Max reportedly hopes to soon break even but didn’t give a timeline for that.
In 2024, it’s likely we will see multiple companies raise prices and cut costs to find ways to raise money. Many streaming services are also looking into ways to improve ads to make them more profitable for companies. This could result in more interactive and shoppable ads or ads in new places like pause screens.
The question now is how long will investors keep pouring money into unprofitable services to keep them afloat? Without deep-pocket companies like Disney, or investors backing up smaller streaming services, many of them may soon run out of cash.
The truth is for many services, 2024 may be a make-it-or-break-it year, especially for services that don’t have large backers.