Ever since Disney+ was announced, expectations for the service began to grow, not just from Disney fans wanting to watch classic content and original programming, but from investors, who could see the tide turning against traditional television, knowing the Disney+ had the potential to be a Netflix killer.

Nearly two years from its launch, Disney+ has been an incredible success around the world.  Pulling in over 116 million subscribers worldwide and beating Disney’s own projected forecasts by years.

But recently, during a Q&A session at the Goldman Sachs 30th Annual Communacopia Conference, Disney CEO Bob Chapek revealed that subscriber growth has slowed down.

The thing I think that’s really important about sort of taking a more global approach to our direct-to-consumer business, and this is one thing that I think we are not exactly aligned with the street on is the quarter-to-quarter business is not linear. I think people looked at our projections last December and said, they want to get to 230, 260 or whatever the numbers are and they divided by the number of quarters, say they need to add X per quarter.

What we are finding out as you’ve seen from our last several quarters in terms of our earnings is that these numbers are tend to be a lot noisier than a straight line. They are not a straight line relationship quarter-to-quarter-to-quarter, and indeed we’ve seen some of that this current quarter. We are very confident about our long-term sub growth as we have been.

In Q4, I think what you can expect to see is that our global paid subs will increase by low single-digit millions of subscribers versus Q3. But importantly, our core market sub growth will continue both domestically and internationally in Q4, but we hit some headwinds. Two of the headwinds I already talked about. Latin America, again, trying to mobilize the partners, get that thing going just like we saw with Disney+. In India, the IPL (cricket) shift and the fact that you have got to go back and reclaim all your subscribers all over again, which we are confident we can do, but obviously, it’s sort of a day-by-day, it’s a clawback, if you will.

This has led to Barclays downgrading its stock guidance on the Walt Disney Company, stating that Disney needs to make some bold changes to reverse the slowing growth of its Disney+ streaming service.

Barclays analyst Kannan Venkateshwar said:

“While the company (Disney) appears to be targeting one new piece of content a week, not every piece of content has the same franchise value or visibility,”

One piece of original content a week might work to keep new subscribers engaged, should it be high-level shows or films like “The Mandalorian” or “WandaVision”, but this week, for example, there is just a behind-the-scenes video about how they made “Black Widow”.

To compete with Netflix, HBO Max or Amazon, Disney+ needs more original content to get new subscribers and, more importantly, keep them.

According to Barclays, the slowdown in Disney+ subscribers could not be solely attributed to a pull forward in additions in 2020, when streaming platforms gained popularity as people hunkering down at home sought entertainment.  And they feel that to achieve its target of 230 million to 260 million Disney+ subscribers by the end of fiscal 2024, Disney will need to more than double its current pace of growth to at least the same level as Netflix.

Disney has announced they are making over 100 original shows across Europe, Asia and the Pacific. More content is expected to be revealed on Disney+ Day on November 12th, which could help drive new subscribers and keep investors happy.

The news of Barclay’s downgrade has caused Disney’s stock price to tumble, as investors become increasingly worried about Disney’s approach to Disney+.

There are many options Disney has to boost the amount of content available on Disney+.  It has a vast collection of films and series that haven’t been added to Disney+ already, such as “House Of Mouse” and “Enchanted”.  Plus, there are vast amounts of content from 20th Century Studios that they’ve not been able to utilise, especially in the US.  We’ve got a list of over 800 titles missing from Disney+ in the US, which could be utilised to bulk out the library, just by using their existing content.

Disney could buy itself out of many of the pre-existing contracts that are keeping content on other platforms. Without a doubt, the biggest stumbling block for Disney+ not growing in the US, is the lack of content for the entire family, such as teenagers and adults.  Internationally, Disney+ added the general entertainment brand, Star, adding shows like “Family Guy” and “American Horror Story” onto the platform, reducing the churn rate and doubling the size of the library available.  But this can’t be done until Disney has completed its purchase of Hulu from Comcast and the current contract with HBO expires next year.

The international expansion will continue to add more subscribers.  Disney+ will launch in Japan, South Korea, Hong Kong, and Taiwan in the next few weeks.  And next year, Disney+ will launch in more European countries and in the Middle East. Still, eventually, Disney+ will be available in the majority of the world, so won’t have any more ways of adding subscribers in bulk quickly without creating more original content.

Disney also hasn’t fully pulled away from its linear television release schedule, especially with shows from the Disney Channel or National Geographic, which could drastically increase the amount of new content available on Disney+.  Either using a same-day/next-day release schedule like Disney uses with ABC and Hulu, or just moving more content directly over to Disney+.

There are multiple ways for Disney+ to improve, but this pressure from investors will undoubtedly have a much more significant impact on those running Disney+ than any consumer feedback.  But if this leads to a better product for subscribers, it can only be good news.

What do you think Disney+ has to do to continue to grow?


Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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  1. Alex October 18, 2021

    Strategies. Netflix = Netflix worldwide. Amazon Prime = Amazon Prime worldwide. Disney = Disney+, Hulu in US. Disney+, Star+ in Latin America. Disney+Hotstar in India and SE Asia. Disney+Star in other regions except the aforementioned. ESPN/Sports are a different category, but bottom line it's a mess. Just have Disney+Star (or Disney+Hotstar for branding) everywhere for the SVOD solution. Hulu can be the AVOD sister company/cheap/live tv/licensing solution. Right now they are just throwing shit on the wall and seeing what sticks.

  2. Liam Stuart October 19, 2021

    The only way for them to grow subscribers again to me is to add more library titles. They always add little bits of the library every month, except for April 2021. Disney could just simply go back to the roots that was April 2021. To add the titles from the past that everyone has been constantly asking for would really help them. So what I am saying is, rather than adding National Geographic shows every month, adding more originals, or rebooting every franchise or show or movie, they need to focus more on the missing library titles. That could really help them.