Disney has announced that it plans to combine its two most popular streaming services into a single app for North American users.
- The Disney Corporation held its second-quarter earnings call on Wednesday afternoon, revealing a 13% increase in revenue and plans for the future.
- The largest announcement was a new combined app with the full contents of Disney+ and Hulu, similar to international versions of Disney+ that provide content from both, that will launch before the end of the year.
- CEO Bob Iger argues that the consolidation will present new opportunities to grow advertising revenue under a single larger streaming service.
- Disney+ is also set to launch ad-free and lower-tier versions of the service, raising prices on the current subscription.
- Average monthly user revenue has increased by 20% amid widespread layoffs and restructuring.
- Disney’s stock valuation decreased by 8.9% after investors learned that Disney+ had lost 4 million subscribers.
Why It’s News
Ever since Bob Iger rejoined the company in November, Disney has maintained a directive of attempting to right the ship and return profitability to a company that has become unwieldy, expensive, and suffered from hemmoraging viewership and multiple box office failures. Previous CEO Bob Chapek’s management sparked some of these problems, but others have been endemic with the company since Iger retired in 2021.
The Disney Corporation additionally continues to face a heated and ongoing feud with the Florida government, led by the governor and likely presidential candidate Ron DeSantis, which Iger chastised in the Wednesday investor call.
In a strategic shift, Disney will be making significant changes to Disney+ to make it more profitable. The company announced Wednesday that the streaming service would be cutting back on the high volume of original content being produced for the platform and removing some existing content, as existing content needs to be driving subscriber growth.
The move could also signal a larger shift in the digital streaming landscape. As we previously reported, every major streaming company reported losses last year, as the “streaming wars” have proven to be expensive and difficult to monetize in the long term. The recent consolidation of HBO Max and Discovery+ into the Max app could reflect a declining market for streaming and a coming period of additional consolidation between streaming services.
“I’m pleased to announce that we will soon begin offering a one-app experience domestically that incorporates our Hulu content via Disney+ while we continue to offer Disney+, Hulu, and ESPN+ as standalone options. This is a logical progression of our [direct-to-consumer] offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” says Iger.