Disney+ lost 3 million subscribers in the first quarter of 2023, driven by a loss of 4.6 million subscribers through Hotstar. Disney+ also lost 300,000 subscribers in the United States and Canada following a price increase but gained 900,000 elsewhere. It ended the quarter with a total of 157.8 million subscribers worldwide. The direct-to-consumer business continues to make a massive loss but the company is confident that it will turn that around.

The Walt Disney Company reported revenues of $21.82 billion for the first quarter of 2023. That was up 13% on the same quarter the previous year.

Direct-to-consumer revenues, which includes Disney+, ESPN+ and Hulu, were $5.51 billion, up from $4.90 billion in the same quarter the previous year, with losses reducing to $659 million compared to $887 million.

Disney has lost over $1.7 billion on its direct-to-consumer services in the just six months.

Meanwhile, the revenues for the linear television business decreased by 7% to $6.6 billion for the quarter, and operating income fell by 35% to $1.8 billion. Domestic channels contributed the majority of that revenue and income, with international channels providing just £85 million in income.

Disney+ ended the first quarter of 2023 with a total of 157.8 million subscribers globally, of which 46.3 million were in the United States and Canada.

Disney+ subscribers 2023 Q1. Source: informitv Multiscreen Index; company reports

ESPN+ had 25.3 million subscribers, while Hulu a total of 48.2 million, of which 4.4 million were for the live television package.

Average monthly revenue per user for Disney+ in the United States and Canada increased 20% to $7.14 as a result of a price rise. It was largely unchanged for ESPN+ at $5.64 per month, but Hulu Live TV customers are now providing an average of $92.32 per month.

Speaking to analysts, Bob Iger, who has returned to Disney as chief executive, said: “I’ve been back in the company for almost six months, and in that time, we’ve embarked on a significant transformation to strategically realign Disney for sustained growth and success.”

The company has been cutting costs and shedding staff, aiming to save $5.5 billion with a reduction of 7,000 jobs.

“We’re delivering progress on the number of fronts, including a reduction in streaming operating losses this quarter,” he said. “I’m very optimistic about our direct-to-consumer business longer term.”

He announced that by the end of 2023, the company aims to offer a single app in the United States that incorporates its Hulu offering through Disney+.

He said that while it will continue to offer Disney+, Hulu, and ESPN+ as stand-alone options, an integrated offering will lead to a more unified experience for subscribers.

That is interesting, because Comcast still has a minority stake in Hulu. “How that ultimately unfolds is, to some extent, in the hands of Comcast,” he said. “I can say we’ve had some conversations with them already,” he added, “but I can’t tell you and I can’t really say where they end up, only to say that there seems to be real value in having general entertainment combined with Disney+.”

There are plans to launch an advertising tier for Disney+ in Europe by the end of 2023.

“The truth is, we have only just begun to scratch the surface of what we can do with advertising on Disney+, and I’m incredibly bullish on our longer-term advertising positioning,” he proclaimed. He said he was confident that the company is on the right path for long-term profitability online. “We’re doing the essential work now to position our streaming business for sustained growth and success in the future.”

He also noted that the company had spent a lot of money in marketing and local programming launching Disney+ in many markets with low average revenue per user. He said the company was looking to “reduce expenses in those markets where the revenue potential just isn’t there”.