Disney+Hotstar sees 25% drop in active subscribers; company focused on curbing account sharing

The media giant Disney continues to lose subscribers across many of its streaming services globally. It disclosed its third fiscal quarter 2023 results, which marked the third consecutive quarter of declining global subscribers. In the quarter concluding in June, Disney+ Hotstar observed a drop of approximately 25% in its customer base, equivalent to 12.5 million subscribers.

The subscriber count of Hotstar reached 40.4 million by the end of June, signifying a reduction of roughly 21 million since October 2022. Globally, Disney+ subscribers decreased by 7.4%, declining from 157.8 million to 146.1 million. In the United States and Canada, Disney+ experienced a loss of 300,000 subscribers, while Hulu gained a comparable number.

In India, Disney lost the IPL streaming bid to Reliance’s JioCinema this year. The latter streamed the cricket tournament for free. This could possibly be one of the reasons why the streaming service has incurred such a dent in its subscribers. 

During the earnings call, Bob Iger, CEO, Disney, emphasised that the company is currently exploring ways to curb account sharing for its streaming services.

Although specific figures were not provided, he indicated that the prevalence of account sharing is significant. Iger also mentioned that detailed information about the company's strategy to address this concern will be unveiled later in the year. He stated, "We possess the technical capabilities to monitor a substantial portion of this activity."

Iger emphasised that account-sharing will be a priority for the company in 2024. Disney plans to update subscriber agreements with additional terms on sharing policies later this year, aiming to optimise these policies for enhanced monetization in the upcoming calendar year.

Compared to the corresponding period in the previous year, losses in the direct-to-consumer unit were halved. The DTC operations incurred a loss of $512 million, in contrast to the $1 billion loss recorded in the same timeframe in 2022.

Disney's linear networks witnessed a 23% decrease in operating income, totaling $1.9 billion from a revenue of $6.7 billion, marking a 6% decrease. Meanwhile, Disney's Parks, Experiences, and Products division observed a 13% increase in revenue, reaching $8.3 billion, while operating income grew by 11% to $2.4 billion.

In Q3 2023, the company reported a net loss of $460 million. Its revenue stood at $22.3 billion, reflecting a 4% increase from the year-ago quarter, while operating income amounted to $3.6 billion, marking a 6% decrease.