(News Bulletin 247) – The media giant has seen its subscriber base decline for the second consecutive quarter and its chief financial officer has warned that streaming losses are expected to widen in the current quarter.

Bad times for Mickey on the Stock Exchange. Shares in media and entertainment giant Walt Disney fell more than 8.5% on Wall Street at the start of trading on Thursday following the publication of its quarterly results.

If the main financial indicators came out in line with expectations, the American group is paying for the drop in subscribers on its most important Disney+ streaming service. Over the first three months of the year (which corresponds to the second quarter of the group’s 2022-2023 financial year), the number of paying subscribers stood at 157.8 million, down 2% compared to last three months of 2022.

According to a consensus quoted by CNBC, analysts had expected a higher figure, at 163.17 million subscribers. This is the second consecutive quarter of a decline in Disney+ subscribers.

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Reduced losses

Price hikes passed by the company have nevertheless helped to increase revenue per subscriber, up 13% year on year to 4.44 dollars.

The group has also managed to compress the operating loss in its “direct-to-consumer” segment, which includes Disney+ but also the other streaming services, namely Hulu and ESPN+. The loss amounted to 659 million dollars for the quarter against 887 million dollars a year earlier, and a consensus of 850 million dollars.

However, Christine McCarthy, the group’s chief financial officer, told analysts the loss is expected to widen by $100 million in the current quarter, Bloomberg reported. This due to higher marketing costs. This puts a stop to the efforts implemented by the group to try to approach financial equilibrium in streaming.

Disney had notably introduced in December in the United States a Disney + offer with advertising while raising the price of its subscription without advertising, from 8 dollars to 11 dollars, following in the footsteps of other video viewing platforms, Netflix in the lead. But, unlike Disney+, Netflix manages to garner subscribers, posting growth for three consecutive quarters.

Massive cost reductions

Disney Chief Executive Bob Iger, also quoted by Bloomberg, told analysts that Disney plans to further raise prices on its ad-free offering this year and will also slash program costs by removing films and shows from its catalogs. emissions.

Emblematic leader of Disney from 2005 to 2020, Bob Iger was called to the rescue in November to take over the controls of the group which had then ejected general manager Bob Chapek. Chapek’s firing then followed Disney’s publication of massive streaming losses of nearly $1.5 billion.

Since then Bob Iger has tightened the screw to put the American giant back on its feet, unveiling a $5.5 billion savings plan in February with 7,000 job cuts and a reorganization into three divisions. According to AFP, the manager told analysts that the company was on track to meet or exceed this cost reduction target.

Outside of streaming, Disney’s growth was driven by its amusement park and merchandise-related services, which posted 17% growth in revenue and 23% in operating profit. The group benefited from good momentum in its parks in Shanghai, Hong Kong and Paris, where attendance increased.

In total revenues rose 13% over one year to 21.82 billion euros, slightly above expectations, while its adjusted earnings per share stood at 93 cents, right in line with the consensus.