With the advent of OTT the spectrum for creators have exploded through the roof. Also, this way of consuming content is beneficial for business as well given the lack of interest audiences have towards going to the theatres. However, as the companies realized the profit in this business, more and more OTT services kept getting formed. At this point, every company basically has an OTT platform. Audiences have gotten exhausted to subscribe each and every platform. Hence, from 2022 we’ve seen a trend that big streaming platforms are losing subscribers. When I say big, I mean the biggest – Netflix. The streaming giant has been trying to earn subscribers for the majority of 2022. Now, it looks like even Disney+ is struggling to sustain its subscribers as the House of Mouse’s streaming platform is planning to merge with Hulu.
Disney+ and Hulu To Merge In Order To Cut Losses!
Disney CFO Christine McCarthy confirms that Disney+ would be dropping some content off their platform and will also produce less content going forward. Along with this, Disney+ also plans to increase the subscription price. These changes are due to the recent catastrophical subscriber loss (4 million) that the platform suffered after losing rights of the Indian Premiere League to Jio Cinema. However, while Disney+ is House of Mouse’s main streaming platform, the company also has a stake of 67% in Hulu.
Disney uses both the platforms to distribute and produce content. After a post-earnings call, the CFO confirmed that the reduction in producing content is to make sure that all content from Disney aligns with their current strategies. This is McCarthy’s official statement:
“We are in the process of reviewing the content on our DTC [Direct-to-Consumer] services to align with the strategic changes in our approach to content curation. As a result, we will be removing certain content from our streaming platforms, and currently expect to take an impairment charge of approximately $1.5 to $1.8 billion. The charge, which will not be recorded in our segment results will primarily be recognized in the third quarter as we complete our review and remove the content.
Going forward, we intend to produce lower volumes of content in alignment with this strategic shift.”
She further commented on the upcoming pricing model of Disney+, “The pricing changes we’ve already implemented have proven successful, and we plan to set a higher price [for] our ad-free tier later this year to better reflect the value of our content offerings.”
McCarthy defended the price hike by stating, “We were pleasantly surprised that the loss of subs, due to what was a substantial increase in pricing for the non-ad-supported Disney+ product, was de minimis. It was some loss, but it was relatively small. That leads us to believe that we, in fact, have pricing elasticity.”
If you have any questions regarding Disney+, feel free to ask in the comments below and stay tuned. As usual, like, subscribe and share our articles as we here are trying to build a community of people High on Cinema!
