After announcing results that fell short of expectations and caused a loss of $15 billion in market value, Walt Disney Co. is reviewing its expenses and looking for a "significant reduction." Due to increasing costs of programming and the cost of worldwide development, the company's direct-to-consumer losses, which were mostly aided by its Disney+ streaming service, more than doubled to $1.47 billion in the fourth quarter of 2022. The operating costs for the third quarter that ended October 2022 declined significantly over that in the previous quarter, according to GlobalData.
Disney's success was also hampered by a decline in cable television advertising revenue. The total revenue and net profit of Walt Disney Co. increased significantly in 2021 over that in the previous years, according to GlobalData.
Over 10% of Disney's stock was lost during extended trading. The stock price is close to where it was in March 2020, at the height of the COVID-19 pandemic. The company added 12.1 million new subscribers to its flagship Disney+ program in the fourth quarter, exceeding projections for gains in the streaming subscriber base. The company has about 236 million members overall, including those for its Hulu and ESPN+ services. These figures follow rival Netflix Inc.'s 2.41 million user additions in the most recent quarter, which exceeded both internal and Wall Street projections.
Disney prioritized streaming as a major area for expansion. The company will charge $8 per month for the Disney+ ad-supported version from December 8, 2022. Its monthly fee for the ad-free version will increase by 38% to $11. With an increasing number of customers signing up for Disney+ as part of a discounted bundle with other services, the company reported a reduction in its average revenue per subscriber. A little over 40% of domestic subscribers are now part of the bundled service.
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