Direct-to-Consumer Losses Lessen, Overall Disney+ Subscriber Count Drops While Core Members Rise 1% in Third Quarter 2023

Jonathan D

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Direct-to-Consumer Losses Lessen, Overall Disney+ Subscriber Count Drops While Core Members Rise 1% in Third Quarter 2023

Direct-to-consumer revenues have increased by 9 percent while the operating loss has almost broken even in the third quarter of 2023. Disney+ subscribers have dropped to 146.1 million, below the 154.8 million goal, though core members of the service rose by 1 percent.

Disney+ and Direct-to-Consumer Revenues in Q3 2023


In the company’s Q3 2023 earnings call, it was shared that Disney’s revenues for their direct-to-consumer products — Disney+, Hulu, and ESPN+ — increased by 9 percent to $5.5 billion dollars, though their operating loss nearly broke even.

A variety of causes led to this update, including lower losses at Disney+ thanks to higher subscription revenue and a decrease in marketing costs, a higher operating income at Hulu, and a lower loss at ESPN+.

During the call, Iger stated that Disney overachieved right out the gate with Disney+, while still determining strategies for content and prices. Their goal since Iger returned to his post as CEO has been to rationalize the volume of content, what to spend, what markets to target.


The full update on Disney’s direct-to-consumer revenues is available below:

Direct-to-Consumer revenues for the quarter increased 9 percent to $5.5 billion and operating loss decreased to $0.5 billion from a loss of $1.1 billion.

The decrease in operating loss was due to a lower loss at Disney+, higher operating income at Hulu and a lower loss at ESPN+. The improvement at Disney+ was due to higher subscription revenue and a decrease in marketing costs, partially offset by higher programming and production costs and lower advertising revenue.

Higher subscription revenue was attributable to Disney+ Core subscriber growth and increases in Disney+ Core retail pricing. The increase in programming and production costs was due to higher costs for non-sports content, partially offset by a decrease in sports programming costs.

The decreases in sports programming costs and advertising revenue reflected the comparison to IPL cricket programming in the prior-year quarter, as we did not renew the digital rights beginning with the 2023 season. Higher costs for non-sports content were due to more content provided on the service.

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There has certainly been tumult in the third quarter, with dramatic shifts and disappointing performances at the box office impacting Disney as a whole. CFO Christine McCarthy stepped down from her position while Iger’s public perception was damaged after calling demands from striking actors and writers “not realistic.”

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While “Indiana Jones and the Dial of Destiny” and “Haunted Mansion” have not been financially stellar, other films such as “Elemental” have made a surprise comeback — while Iger has also discussed opportunities to “turbocharge” theme park growth.

Rumors continue to circulate that Apple might eventually acquire Disney, though Iger has denied this at various points while also admitting he is considering the sale of various media assets.

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In Florida, there’s an ongoing legal battle with Florida Governor Ron DeSantis over the governance of the area in which Walt Disney World is located, though Iger and the company are continuing to pursue the matter in court, with the CEO himself stating it is “not our goal to be engaged in a culture war.”

The Walt Disney Company in Q2 2023

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Previously, The Walt Disney Company announced approximately $21.8 billion in revenue during the second quarter of 2023. Their adjusted earnings per share (EPS) was $0.93, a decrease from $1.08 in last year’s quarter. This was for the period of January 1 to April 1, 2023. Disney Parks reported $7.78 billion in revenue during quarter two and Disney+ lost 4 million subscribers (but the financial performance of streaming did improve, as Iger said).

Throughout the second quarter, and continuing until the end of May, Disney completed three major rounds of layoffs in an aim to cut coasts within their media operations.

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CEO Bob Iger has extended his return as leader of the company through 2026 and brought back former colleagues Kevin Mayer and Tom Staggs to advise on television strategy moving forward. In a recent major upheaval of their TV properties, ESPN will now be launching a sportsbook with PENN Entertainment, officially becoming a major player in legal sports betting.

Here’s a selection of major stories from today’s earnings call compiled together:

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