Disney’s Q1 earnings point to a company in transition, with current CEO Bob Iger making a significant turn away from the priorities of former CEO Bob Chapek.
Disney+ subscription service lost 4 million subscribers in Q1, the second consecutive quarter with a net drop. This can be attributed to Iger’s decision to increase prices for Disney+ and the company’s other streaming services.
The decrease in subscribers has been more than offset by an increase in average revenue per user (APRU), rising from $5.95 to $7.14. Disney has also begun to tap into a new revenue stream by introducing an ad-supported service tier. As a result, Q1 losses from Disney’s streaming division fell by 26%.
Under Chapek, Disney’s prime directive was to expand its market share in streaming. By that measure, a quarterly loss of 4 million subscribers would have been viewed as a failure. But under Iger, the new #1 priority has become running a profitable business. Steps such as raising subscription costs, introducing advertising, and folding content from Hulu into Disney+ are all steps toward that goal.
See also: Disney+ to Add Hulu Content in ‘One-App Experience’ Later in 2023, Prices for Disney+ to Increase (Variety) and Disney’s Bob Iger Reveals “Cordial” And “Constructive” Talks Have Started With Comcast About Buying Out Its Hulu Stake (Deadline)