Disney Finally Has More Subscribers Than Netflix, But Experts Say Disney Showed “Overconfidence”

On August 10, Disney had its Third Quarter Earnings Call, and, overall, the call went exceptionally well. One of the highlights for Disney CEO Bob Chapek was how well Disney+ is doing. Disney launched the streaming platform in 2019 and in those three years, some truly great content has come out, including The Mandalorian, The Mysterious Benedict Society, WandaVision, The Imagineering Story, and The Falcon and the Winter Soldier. And that is just naming a few. During the earnings call, CFO Christine McCarthy shared that the company expects Disney+ to be profitable by 2024.

Credit: Disney

One of the biggest accomplishments that Chapek and McCarthy celebrated was that Disney now has more subscribers to its streaming platforms than Netflix — that number combines Disney+, Hulu, Disney+ HotStar, and ESPN+. While Disney hopes to keep those subscriber numbers up, but experts say that could be a struggle as time goes on. Disney doesn’t seem to know what it wants to do with Hulu and a lot of the success that Disney+ sees comes, not from original Disney programming, but from shows created by two franchises — Marvel and Star Wars.

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Disney is also seeing steeper competition from both Netflix and Amazon when it comes to in-demand programming. A report from The Wrap explains how Disney may have been too overconfident in its programming choices:

• A year ago, Disney+ had four of the five most in-demand streaming originals by U.S. audience demand in the April-June quarter. This past quarter it had two.
• In a show of overconfidence, Disney+ scheduled “Obi-Wan Kenobi” to debut directly against the fourth season of Netflix’s “Stranger Things” on May 27. “Stranger Things” drew several times more demand than “Obi-Wan Kenobi” with both global and U.S. audiences.
• Disney+ pushed back the next “Star Wars” live action series, “Andor,” from Aug. 31 to Sept. 21 in order to avoid competing with the debuts of HBO’s “Game of Thrones” spin-off “House of the Dragon” and Amazon Prime Video’s “Lord of the Rings: The Rings of Power.”
• Losing the Indian Premier League cricket streaming rights will cause Disney’s global subscriber numbers to take a hit. 

Credit: Disney

One of Disney’s biggest problems at this point appears to be Hulu, and a new activist investor — Daniel Loeb — believes that Disney should take Hulu and Disney+ and combine them into one platform. Originally, Disney purchased Hulu so that it could have “mature content” on that platform instead of on Disney+. However, Disney+ now has content that is not only rated MA (mature audience) but also rated R, with the addition of Deadpool and Logan. The second issue Disney needs to figure out is how to keep creating popular new Disney+ content that does not come from Marvel or Star Wars.

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On December 8, Disney will launch an ad-supported tier of Disney+ for $7.99 per month. Those who wish to continue to have an ad-free version of Disney+ will have to pay $10.99 per month. Seeing how the price hike affects Disney+ subscriber numbers will be one of the true tests to see just how loyal Disney+ streaming subscribers are.