To recover, Disney declares war on subscription sharing. What changes?
Called to take on the role of CEO again in an attempt to save Disney from the abyss, the CEO declares war on shared subscriptions like Netflix did, in the hope that users will increase rather than decrease
The last glimpse of 2023 revealed that Bob Iger 's recipe – called upon to once again cover the role of CEO in an attempt to save Disney from the abyss – was starting to work. The result of the recipe was in reality a very bitter pill for the company and for the employees – especially for the many decimated by the layoffs -, but at least it allowed the Group founded by Walt Disney to close the quarter ending on 30 December 2023 with revenues unchanged at 23.5 billion dollars and a net profit of 1.91 billion dollars compared to 1.28 billion a year ago. Diluted earnings per share (EPS) increased to $1.04 from $0.70 in the same quarter a year earlier. The company had also said it was on track to meet or exceed its annualized savings target of $7.5 billion by the end of fiscal 2024, but would continue to look for additional efficiency opportunities. And these, for Disney, would reside on the streaming front in blocking the sharing of subscription passwords on the Netflix model.
DISNEY BLOCKS SHARING OF SUBSCRIPTIONS
In fact, CEO Iger revealed in an interview with CNBC that he intends to proceed, along the lines of what some rivals have already done, with a sudden block on the sharing of Disney+ passwords and profiles. The tolerance shown so far (but in reality it is a real reversal of commercial strategy) will end in June and will start only in some countries not yet specified, and will then be extended to all subscribers by September.
By the end of 2023, Igers has managed to bring almost 7 million new subscribers to Disney+ and is not scared by the possibility that the new rules will create a hemorrhage of users, given that Netflix – which as is known has played ahead of the curve with reference to this strategy – he still managed to increase them.
It may be that, following the example of its rival, the House of Mickey Mouse also offers subscriptions at lower prices with advertising. Iger described this operation as Disney's "first real foray into password sharing territory", specifying that the block will start "only in some countries and in some markets".
THE RETURN PLAN AND THE SQUEEZE IN THE CIRCULATION OF PASSWORDS
In January, Disney updated and notified Disney+ subscribers of recent changes to its subscription agreement. Based on the strength of its latest earnings results and expectations for the remainder of the year, Disney expects full-year fiscal 2024 earnings per share, excluding certain items, to increase by at least 20% versus 2023, to approximately 4 $.60.
Additionally, the US entertainment giant continues to expect to achieve profitability in the combined streaming businesses in the fourth quarter of fiscal 2024 and is making progress in this area, with first quarter Entertainment DTC operating losses improving by almost $300 million compared to the previous quarter.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/per-risollevarsi-disney-dichiara-guerra-alla-condivisione-degli-abbonamenti-cosa-cambia-per-lutenza/ on Mon, 08 Apr 2024 14:09:28 +0000.