Disney Cutting Tons of Content From Disney+

On May 10, The Walt Disney Company held its second-quarter earnings call for 2023. During that call, Disney CEO Bob Iger and CFO Christine McCarthy shared that the company had made just under $22 billion in revenue. This was partly due to the large increase in ticket prices at Disney Parks around the globe. Iger has, however, admitted that Disney may have been “too aggressive” in its Park pricing. Just before the earnings call, Disney announced that it would be making big changes in the Parks to make Guests feel like they were getting a good deal for their money. These changes include bringing back the dining plan, getting rid of theme park reservations for certain Guests, and giving Annual Passholders more days when they don’t need reservations.

During the call, Disney also announced that its streaming platform, Disney+, had lost 4 million subscribers. That made the second fiscal quarter of 2023 the second quarter in a row that Disney+ had lost millions of subscribers. Iger said that a majority of the subscriber loss was due to the pricing changes made to Disney+ when the ad-supported tier was introduced in December 2022. The ad-supported tier started at $7.99 per month, while the ad-free tier shot up from $7.99 per month to $10.99 per month.

Since its launch in 2019, Disney+ has not only featured classic Disney films and television shows, but has also created a ton of original programming like The Mandalorian, Diary of a Future President, Hocus Pocus 2, The Mysterious Benedict Society, The Mighty Ducks: Game Changers, National Treasure: Edge of History, and so much more. While some of the original shows and films were hits with fans, some of the shows just didn’t hit the way that Disney was hoping they would.

In an attempt to cut down on the massive losses that Disney+ is experiencing, not only in subscribers, but also monetarily, Iger announced that Disney would be cutting a lot of programming currently on Disney+.

“We realized that we made a lot of content that is not necessarily driving sub growth, and we’re getting much more surgical about what it is we make. So as we look to reduce content spend, we’re looking to reduce it in a way that should not have any impact at all on subs.”

Iger also said that, because they spent so much money on creating original content and flooding the market, the company didn’t leave enough to properly market what they had created.

“When you make a lot of content, everything needs to be marketed. You’re spending a lot of money on marketing that are not going to have an impact on the bottom line except negatively due to the marketing costs. We believe we actually have an opportunity to lean into those more, put the right marketing dollars against it, allocate more, or basically away from, programming that was not driving any subs at all. This is part of the maturation process as we grow into a business that we had never been in. We’re learning a lot more about it, specifically we’re learning a lot more about how our content behaves on the service and what it is consumers want.”

The cutting of content on Disney+ comes as Iger continues to cut Disney’s budget. During the shareholders’ meeting in February, Iger said that he would be cutting the budget by $5.5 billion. With the cutting of programming to Disney+ and crunching down on production costs, Iger managed to keep losses on Disney+ to $400 million, which is 26% less than the losses from the previous quarter.

Disney began showing just how serious they were about being more focused on less content, but higher quality. Over the past several months, Disney+ has announced the cancellation of over half a dozen shows. This includes National Treasure: The Edge of History, The Mysterious Benedict Society, Turner & Hooch, The Mighty Ducks: Game Changers, and Willow.

That was not the only major Disney+ change that was announced during the earnings call. Iger also revealed that, soon, subscribers who have the Disney Bundle — which includes Disney+, Hulu, and ESPN+ — will be able to watch all of their favorite programming in one place. Disney will be launching a new app that will have the bundle streaming services all in one place. Iger did not give a specific date when the new app would be launched.