Disney Plus fails to lure in subscribers

 Disney Plus fails to lure in subscribers

Disney Plus fails to lure in subscribers.

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Despite adding $2.1 million Disney+ subscribers, Disney missed Wall Street earnings estimates for the quarter ended Oct. 2. Disney’s revenue jumped 26% to $18.53 billion from $14.71 billion last year, however missed analysts’ earnings expectations.

After posting the results on Wednesday, Disney shares dropped as much as 5% in after-trading hours.

Disney is still facing stagnant growth caused by the coronavirus pandemic. During this quarter last year the company suffered a profit loss of $710 million due to closures of its theme parks and holiday resorts. This year in comparison it reported a fourth-quarter profit of $159 million.

On demand streaming service, Disney Plus, made less from each paying subscriber this quarter than this time last year, down from $4.52 to $4.12. Disney Plus reported 118.1 million subscribers vs 119.6 million that was expected, adding just 2 million new subscribers. Three weeks ago, Netflix, its biggest competitor, posted a solid subscriber growth, adding 4.4 million subscribers in the fourth quarter over the expected $3.84 million.

Netflix is raising its game against Disney Plus, with new series Squid Game, but also by going interactive and recently releasing free video game Stranger Things. Will Disney be able to keep pace with Netflix?

According to Disney’s CFO Christine McCarthy, Disney Plus will be profitable within three years, as she thinks that by September 2024 the company will be able to reach between 230 and 260 million paid subscribers. Moreover, Disney is looking into a number of ways that it could cut costs behind the scenes in its theme parks, such as reducing food portion sizes to help increase profits.

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