netflix, disney plus, disney plus subscriber increase, disney plus vs. netflix, why netflix lost subscribers, why disney is gaining subscribers

Disney seems to gain subscribers while Netflix loses them.

According to Disney’s earnings report for the second quarter of 2022, the company acquired 7.9 million new subscribers to its Disney Plus streaming service during the first quarter, bringing Disney Plus’ total subscribers to around 87.6 million worldwide.

Meanwhile, Netflix reported that it lost 200,000 subscribers last month due to stiffer competition and the inability to expand in some territories due to technological limitations and account sharing.

What’s Disney Plus doing that Netflix isn’t?

The Findings in Disney’s Latest Earnings Report

The Verge mentioned in its report that Disney not only acquired more subscribers to its streaming service but also earned more per subscriber than it previously did in the US. This increase is evidenced by Disney Plus’ monthly revenue per paid subscriber being at $6.32 compared to its previously recorded monthly revenue of $6.01.

Disney credits this improvement to “an increase in retail pricing and a lower mix of wholesale subscribers.”

However, despite gaining subscribers, Disney is losing even more money than it has before due to Disney Plus. This loss is due to higher costs for production, advertising, and technology.

The company feels that the possibility of these costs lowering is unlikely, and raising its prices like what Netflix did could negatively affect Disney Plus’ subscriber growth. This trail of thought led Disney to add ad-supported subscription tiers sooner instead of at a much later date.

What Did Disney Do Right?

Disney noted that its revenue growth happened despite losing money in revenue due to the company ending a customer’s license agreement for film and television content early to use the content on its streaming services.

Simply put, Disney is willing to pay huge sums of money to get pieces of content into its streaming service to evoke a sense of exclusivity, as these pieces of content wouldn’t be found anywhere else but in Disney Plus.

One example is when Netflix removed its Marvel shows while the same suddenly appeared in Disney Plus in March, as noted by Variety and The Hollywood Reporter. According to these publications, Disney may have made an undisclosed deal to get the Marvel movies Netflix has to Disney plus.

Additionally, CNET mentioned in its review of Disney Plus that it is a well-designed streaming app with an affordable that doesn’t make users watch any ads. The review also mentioned that while it doesn’t have much in the way of original works, it has many pieces of content that cannot be found anywhere else, again evoking that sense of exclusivity.

What Netflix Did Wrong

In contrast, Netflix decided to raise its subscription price in the United States and Canada in January 2022, which prompted existing subscribers to cancel their subscriptions, per Make Use Of.

Another reason subscribers are leaving is that Netflix prohibits the sharing of passwords with people who aren’t paying for the streaming service. To counteract this, the company issues extra charges for password sharing for those outside their households, which further drove away existing subscribers, as a separate CNET report mentioned.

Anyway, despite the setbacks, Netflix still has 222 million subscribers. Let’s wait and see if that number goes up or goes down again.

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