In search of profitability for its streaming platforms, including Disney + which lost subscribers for the first time in its history, Disney announced on Wednesday the layoff of 7,000 people. “While it is necessary to deal with the current difficulties, I do not take this decision lightly,” general manager Bob Iger said during a conference call.
Disney+ now has 161.8 million subscribers worldwide, after losing 2.4 million in the final three months of 2022. It’s the first time since the streaming service launched in late 2019 that it hasn’t gained not millions of new viewers in the past quarter.
After the unbridled growth, the economic crisis
“It’s time to complete another transformation, to streamline our formidable streaming business and put it on the path to sustainable growth and profitability,” detailed Bob Iger, referring to the need to “cut costs” and “to improve margins”. The American group employed 190,000 people worldwide in 2021, 80% of them full-time, according to its annual report for that year.
Streaming platforms experienced blazing growth for years, further amplified by the pandemic, before being overtaken by the economic crisis and frantic competition for audience attention.
Netflix, the industry veteran and leader, had a tough first half of 2022 losing nearly 1.2 million subscribers, before bouncing back this fall and winter. The platform has more than 230 million paying subscribers but its annual net profit fell 12% to 4.5 billion.
Streaming applications make the same observation as social networks like Snapchat, Facebook or Instagram: gains in users no longer automatically translate into financial gains.