Disney cut streaming losses by $400 million from the previous quarter but in addition lost subscribers, the corporate said Wednesday, as profits landed as expected from Wall Street.
Disney shares fell 2.4% to $98.75 in after-hours trading.
The corporate plans to expand its streaming offerings by the top of the 12 months with a recent app that mixes Disney+ and Hulu, CEO Bob Iger said.
The brand new app will streamline the viewing experience for users and open up more opportunities for advertisers, said Iger.
Price increases and reduced marketing spending helped improve stream unit performance, which ended the January-March quarter with an operating lack of $659 million.
The division lost $1.1 billion within the previous quarter.
Overall, diluted earnings per share were 93 cents, meeting the consensus forecast of analysts surveyed by Refinitiv.
Revenue reached $21.82 billion, barely above analysts’ forecasts of $21.79 billion.
The corporate’s theme parks were buzzing with visitors, and growth on the Shanghai Disney Resort, Disneyland Paris and Hong Kong Disneyland Resort helped push the unit’s operating income up 23% year-on-year to $2.2 billion.
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“We’re pleased with our performance this quarter, including the improved financial performance of our streaming business, which reflects the strategic changes we’re making across the corporate to align Disney for sustainable growth and success,” Iger said in an announcement.
Total subscribers to the flagship Disney+ service fell by 4 million from the previous quarter to 157.8 million.
A lot of the defections got here from the Disney+ Hotstar deal in India after losing the rights to stream Indian Premier League cricket matches.
Disney also lost 300,000 customers within the US and Canada, where it raised prices last December.
CFO Christine McCarthy warned in February that the corporate expected “modestly higher” cancellations attributable to price increases.
Wall Street is putting pressure on media firms to make the most of the billions of dollars they’ve invested in streaming lately to compete with Netflix.
Iger, who got here out of retirement in November to face the corporate’s challenges, announced a reorganization in February that included a promise to eliminate $5.5 billion in costs, partly through 7,000 layoffs.
As Disney tries to construct streaming, its traditional TV business runs into obstacles.
Linear network operating revenues down 35% year-on-year to $1.8 billion, due partly to higher college football playoffs and NFL sports programming and production costs on ESPN and lower promoting revenues on ABC and its affiliates TV stations.