Thanks to a 7-million increase in Disney+ core subscribers, Disney's flagship streaming service returned to growth in the fourth quarter of the company's fiscal year, which ended September 30. The re-acceleration of subscriber growth helped Disney further cut its streaming losses, as it aims to reach profitability by Q4 2024. In the last quarter, Disney's direct-to-consumer streaming business, which consists of Disney+, Hulu and ESPN+ lost $387 million, down from $1.47 billion a year earlier. For fiscal 2023, DTC operating losses amounted to $2.6 billion, down from $4.0 billion the year before.
Since his return as CEO, Bob Iger has made it his mission to improve the profitability of Disney's streaming business, which is seen as an integral part of the company's future. "We were, as a company, in a global arms race for subscribers," Bob Iger said earlier this year. "In our zeal to go after subscribers, I think we might have gotten a bit too aggressive in terms of our promotion," he added, saying that recent price hikes for Disney+ only resulted in negligible subscriber losses. "Since my return, I have drilled down into every facet of the streaming business to determine how to achieve both profitability and growth," Iger said.
Upon the launch of its highly anticipated streaming service in November 2019, Disney had forecast to reach between 60 and 90 million subscribers in 2024, an estimate that looks highly conservative, if not comically low from today's point of view. In fairness, it needs to be said that the pandemic probably played a role in Disney reaching its goal so far ahead of schedule. Like Netflix, Disney+ likely profited from stay-at-home orders and limited leisure activities in the face of Covid-19. As the pandemic struck in early 2020, with movie theaters and theme parks closed and cruise ship sailings suspended, Disney saw itself forced to double-down on its direct-to-consumer business, with Disney+ at the heart of that strategic shift. Between Disney+, Hulu and ESPN+, Disney had 225 million paid streaming subscribers at the end of last quarter, contributing to a 13-percent year-over-year increase in direct-to-consumer revenue.