Disney's Streaming Woes Allayed by Moana Sequel Success

Introduction

Disney's recent subscriber loss in its streaming service has raised concerns about the company's creativity and viability. However, the long-awaited Moana sequel has provided a much-needed boost to investor confidence.

Subscriber Loss and Price Hikes

Disney's subscriber base for Disney+ declined by 700,000 year-over-year, reaching 125 million at the end of 2022. This drop largely stemmed from international operations, while domestic subscribers saw a marginal increase. The decline followed a price hike in October, with customers facing up to £24 more annually.

Competition from Netflix

Disney continues to face fierce competition from Netflix, which has maintained its dominance in the streaming market. Netflix's technological superiority and success in retaining subscribers despite price increases have presented a significant challenge for Disney.

Streaming Profits and Moana's Impact

Despite the subscriber loss, Disney's streaming business, including Hulu, reported a profit of $293 million in the last quarter. This marked a turnaround from a loss of $138 million in the same period last year. The success of the Moana sequel, along with higher prices and a crackdown on password sharing, contributed to these profits.

Box Office Success and Theme Park Challenges

Disney's film division witnessed strong performance, with a $312 million profit following losses the previous year. The release of "Mufasa: The Lion King" during the holidays also boosted results. However, the theme park division faced challenges due to hurricanes, resulting in a $120 million hit.

Financial Performance and Outlook

Overall, Disney reported a pre-tax profit of $3.7 billion in the quarter, surpassing the $2.9 billion of the previous year. CEO Bob Iger expressed confidence in Disney's creative and financial strength and highlighted the progress made in implementing strategic initiatives.