Disney hiked its streaming prices, and Disney+ subscribers declined for the first time

The Walt Disney Company posted first-quarter earnings Wednesday that beat on the top and bottom lines, but it also revealed the start of predicted streaming subscriber losses at its Disney+ service.

The service lost 700,000 subscribers over the final three months of 2024, which is the first quarter of Disney’s fiscal year 2025. The media and entertainment giant had warned during its fiscal fourth-quarter report in November that it expected a “modest decline” in core subscribers during the first quarter of 2025. 

Hulu picks up the streaming slack

Total paid Disney+ subscriptions currently rest at 124.6 million, compared with 125.3 million at the end of the fiscal fourth quarter. ESPN+ also saw a loss of 700,000 subscribers, currently at 24.9 million, compared with 25.6 million at the end of last quarter.

Though Disney saw losses at Disney+ and ESPN+, total Hulu subscriptions rose to 53.6 million, compared with 52 million at the end of the fiscal fourth quarter. 

The decrease in subscribers came as a result of an increase in prices that Disney announced in August of 2024. The price rose to $9.99 with ads and $15.99 with no ads, following its announcement of continuous playlists and growing offerings. 

“Disney’s earnings beat underscores the success of its cost-cutting initiatives and resilient performance in parks and studios, offsetting headwinds in streaming,” Jesse Cohen, a senior analyst at Investing.com, said in an emailed statement. “However, the surprising loss of Disney+ subscribers—the first decline since its 2019 launch—raises red flags about saturation in a crowded market and the trade-offs of its pricing strategy.”

Disney’s stock was down around 1.5% Wednesday in afternoon trading.

Theme parks hampered by extreme weather

Disney’s domestic parks and experiences business saw a decline of 5% in operating income due to hurricanes and cruise pre-opening expenses. However, it did see operating income increase 28% for international parks.

Although Disney lost subscribers for Disney+ and saw a decline in domestic park attendance, net income increased nearly 23% to $2.64 billion, compared to $2.15 billion during the same quarter last year. Revenue increased 4.8% to $24.69 billion, compared to $23.55 billion from last year. 

“Our results this quarter demonstrate Disney’s creative and financial strength as we advanced the strategic initiatives set in motion over the past two years,” said CEO Robert Iger in a statement.

The company’s success was thanks in part to box office performance from its studios, which had the three top movies in 2024: Inside Out 2, Deadpool & Wolverine, and Moana 2. 

Moana 2, released during Q1, grossed more than $1 billion, which was a driving factor behind the improvement in operating results. 

In its sports content segment, Disney saw a 13% operating income growth. The increase came as a result of college sports and one additional NFL game, as well as Disney’s exit from the Venu Sports, the planned sports-focused streaming service that Disney and other media giants discontinued earlier this year.

The company also plans to launch its own direct-to-customer streaming app for ESPN this fall, company executives said on a conference call Wednesday. 

Disney’s streaming business may continue to face headwinds in a crowded marketplace, particularly among price-conscious viewers. “While profitability in streaming improved, the subscriber dip suggests price hikes or content gaps may be driving churn, particularly as rivals like Netflix and Amazon Prime retain momentum,” Cohen said.

Disney told investors on Wednesday that it expects another decline in subscribers during the second quarter.

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