Analysts expected Disney+ to reach 109 million subscribers in Disney’s most recent financial quarter, but the streaming service fell short, coming in at 103.6 million. The shortfall resulted in lower-than-expected revenue for the company and a small stumble in the share price.
In addition to reporting that Netflix also saw fairly sluggish growth in its quarter, the news suggests there is in fact a limit to the explosive growth streaming platforms have experienced during the COVID-19 pandemic.
Still, Disney remains on track with its current strategy of pumping out TV series into established Disney brands such as Marvel and Star Wars, as well as releasing new movies on the platform as they premiere in theaters.
Speaking to investors, Disney CEO Bob Chapek pointed to the Star Wars TV series The Mandalorian as proof that launching new properties on streaming services can be successful, noting that sales of merchandise related to the show were “extraordinary”. (In other words, people buy a lot of Baby Yoda plushes and the like.)
As such, live-action Disney movie Cruellamarvel movie Black Widowand Dwayne Johnson’s vehicle Jungle Cruise will be released simultaneously on Disney+ and in theaters, even though most theaters in the United States have now reopened as vaccination rates rise in the country.
At least on the business side, this subscriber count is widely seen as a significant disappointment and a worrying trend for Disney’s goal of streaming dominance. For example, the financial publication CNBC described Disney’s slowing subscriber growth as “Netflix itis,” as Netflix has also struggled to keep the wheels spinning as fast as it used to.
Disney+’s situation is arguably more concerning, as Disney+’s monthly fee is already quite low at $7.99 per month, including UltraHD streaming — less than Netflix’s $8.99 for SD, $13.99 for HD, and $13.99 for HD. 17.99 for Ultra HD. That doesn’t give Disney much flexibility.
Still, Disney+ is one of the most successful streaming services, and it’s a testament to that success that it’s even directly compared to Netflix. Most other services like HBO Max or Paramount+ have far fewer subscribers than Disney+ or Netflix.
Content offerings and pricing are obviously the biggest factors in the competition between these platforms, but technology also plays a part. Streaming services have tried to outdo each other in a bit-rate arms race of sorts. For example, HBO’s platforms were notorious for poor video quality compared to Netflix and others, but when HBO Max adopted 4K HDR streaming for its premiere Wonder Woman 1984 in December, the company also significantly improved streaming quality overall.