Disney’s traditional television business is experiencing significant challenges as operating income from its linear networks fell by 11 percent, totaling $1.1 billion in the last financial quarter. This decline reflects broader trends affecting the media landscape, as the company grapples with shifting consumer preferences and increased competition.
In addition to the downturn in its traditional television segment, Disney+ is also facing difficulties. The streaming service reported a slight decrease in subscribers, dropping by one percent from the previous quarter to 124.6 million. This decline comes on the heels of a price increase implemented in October, which the company had anticipated would impact subscriber numbers. Looking ahead, Disney has projected a modest further decrease in Disney+ subscribers for the second quarter.
Advertisers are reportedly growing cautious about engaging with Disney+, particularly in its ad-supported tier. Recent reports indicate that many advertisers are reconsidering their partnerships with the platform after it failed to meet expectations for subscriber growth and viewership. High-profile series from the Star Wars franchise and other Lucasfilm productions have not resonated with audiences, leading to a lack of confidence among advertisers.
An anonymous advertising professional, known as “Kiss My Grits” (KMG), highlighted these issues in a recent appearance on the Valliant Renegade YouTube channel. KMG noted that the subscription numbers for the ad-supported tier are significantly lower than Disney had projected and that the platform has struggled to deliver the expected number of ad impressions to advertisers.
This situation stands in stark contrast to Netflix, which has continued to see strong subscriber growth even after implementing price hikes. As Disney navigates these challenges, the company faces pressure to reassess its strategies in both traditional television and streaming to regain momentum in a rapidly evolving entertainment market.