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The streaming service plans to create a ‘one-app experience’ by adding Hulu content and will bring an ad-based subscription tier to Europe later this year.
Disney has suffered a hit to its streaming division, as its core Disney+ service has lost 4m subscribers in the last quarter.
In its second fiscal quarter of 2023, the streaming service suffered its second drop in subscribers, after hitting its first ever subscriber drop earlier this year.
The streaming service’s biggest loss came from a 4.6m subscriber drop for Disney+ Hotstar, the Indian version of its core service. Disney+ had minor subscriber growth internationally outside of this service, while its domestic US and Canadian market saw a 300,000 drop in subscribers.
The service now has 157.8m subscribers, roughly a 2pc drop from the 161.8m it had last quarter.
In an earnings call, Disney CFO Christine McCarthy said the company will “remove certain content” from its streaming platforms as part of “strategic changes in our approach to content curation”. McCarthy said Disney expects to take an “impairment charge” of up to roughly $1.8bn.
“Going forward, we intend to produce lower volumes of content in alignment with this strategic shift,” McCarthy said.
As part of these changes, Disney CEO Bob Iger said Hulu content will soon be available on Disney+, in order to create a “one-app experience”. Iger said this offering will be rolled-out at the end of 2023.
“While we continue to offer Disney+, Hulu, and ESPN+ as standalone options, this is a logical progression of our DTC (direct-to-consumer) offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said.
In the call, Iger said Disney+ will bring its cheaper ad-based subscription model to Europe by the end of 2023, along with a price increase to its ad-free offer “later this year”.
“The truth is, we have only just begun to scratch the surface of what we can do with advertising on Disney+, and I’m incredibly bullish on our longer-term advertising positioning,” Iger said.
The combination of Disney+, Hulu and ESPN+ subscribers reached 231.3m in its latest quarter, which has dropped below Netflix’s latest subscriber figure. The streaming giant had 232.5m subscribers in its Q1 results, up from 230.75m at the end of 2022.
Disney’s combined streaming services surpassed Netflix for the first time last August and continued to take the lead last November.
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