Disney has landed a serious blow against arch-rival Netflix in the streaming wars, as the house of Mickey Mouse overtakes its nemesis on subscriptions.
Disney that 221.1 million people now subscribe to its streaming services, according to its Q2 2022 report.
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This means it has overtaken Netflix which has lost 970,000 subscribers and now only has 220.6 million subscribers.
Disney is, understandably, in a celebratory mood after toppling the old king of online streaming.
“We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms,” Bob Chapek, CEO at the Walt Disney Company, said in a statement.
The victory is, however, not as clear cut it may seem at first glance. While Disney+ has certainly positioned itself well against its Los Gatos-headquartered rival, the 221.1 million subscribers mentioned earlier aren’t all on that platform.
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By GlobalDataInstead, Disney’s subscribers are spread out across three streaming platforms. Disney+ currently has 152.1 million subscribers whereas Hulu has 46.2 million and ESPN has 22.8 million, according to the new quarterly results.
Amazon Prime Video has firmly secured its position in third place, behind rivals Disney and Netflix in the streaming wars. The Prime streaming service is reported to have around 117 million subscribers worldwide, according to Renolon.
The other major player in the wars, Apple, has not revealed its subscriber numbers. However, it is estimated that Apple TV may have around 40 million subscribers, according to financial news outlet Barron’s.
Netflix and Disney were close before the streaming wars
The news highlights the continuing challenges Netflix faces and how its rivalry with Disney has worsened as the streaming wars heat up. The two companies haven’t always been rivals.
Back in 2012, Netflix and Disney inked an exclusive film distribution deal. This was why Netflix subscribers could enjoy Marvel Cinematic Universe shows like Daredevil, Jessica Jones and The Defenders.
In 2016, they grew even closer, with Netflix becoming the official home for Disney films.
However, Netflix and Disney’s partnership have evaporated over the past few years, highlighted by how how movies and shows have been removed from the first streaming platform to and put onto Disney+.
“Disney’s success in the streaming wars debunks any notion of the Great Unsubscribe,” says Tien Tzuo, CEO and founder at Zuora. “We are in the golden age of media, and Disney knows consumers will continue to subscribe for something they find indispensable.”
Tzuo says that Disney certainly knows what it has to do, to get ahead in the streaming wars. Disney knows how to use its business model and content to gain new subscribers and keep existing ones coming back for more.
“Disney is doing everything right with creative packaging by not forcing a one-size-fits-all model, while still offering the best deal if subscribers want everything,” says Tzuo. “Plus, with its phased release strategy, Disney keeps subscribers coming back week after week.”
Francesca Gregory, thematic analyst at research firm GlobalData, warns Disney that it shouldn’t take its foot off the pedal anytime soon.
“[The] company is not immune to the industry’s endemic problem of sky-high content spending with limited profitability,” Gregory says in a new podcast from GlobalData. “While Disney’s platforms continue to entice subscribers, its streaming business recorded a $1.1bn loss across the quarter.
“Getting subscribers through the door with a (relatively) cheap and cheerful service was always likely to be the easy part. Reconciling subscriber numbers with content spend will be the real challenge if Disney is to achieve its aim to make its streaming business profitable by 2024. Price hikes of 38% across the Disney+ ad-free version should boost revenue when combined with the rollout of its ad-supported tier.
“Although starting light, Disney will up the ad load of its new tier over time. The tier is aimed at cash-strapped consumers amid the deepening cost-of-living crisis. While this should prevent a mass exodus from Disney’s streaming platforms, slower subscriber growth rates are likely as the service is watered down. While the latest results have given the company breathing room, it remains to be seen if Disney can balance subscriber growth and profitability.”
GlobalData is the parent company of Verdict and its sister publications.
