Walt Disney Co.‘s streaming service, Disney+, has reportedly encountered obstacles in meeting its subscriber targets, according to sources familiar with the matter.
The company’s goal of reaching 215 million to 245 million subscribers by 2024, set by former CEO Bob Chapek in August 2022, is now expected to fall short, Bloomberg reported Thursday (Sept. 14), citing unnamed sources.
Disney did not immediately reply to PYMNTS’ request for comment.
Earlier, in 2020, the company had aimed for as many as 260 million subscribers by 2024 for Disney+ and the Hotstar service in India, according to the report.
One of the primary reasons for Disney+’s subscriber shortfall is the loss of customers following price increases, the report said. Since its launch in 2019, Disney+ has raised its subscription fees in an attempt to achieve profitability in its streaming business. While these price hikes have contributed to narrowing losses in the streaming division, they have also led to customer attrition.
Another significant factor impacting Disney+’s subscriber numbers is the collapsing demand in India, per the report. The company failed to secure cricket streaming rights and, after that, the Indian market, has not grown as anticipated.
In the time since Chapek’s setting of the goal, Disney has adjusted its approach to subscriber forecasts, according to the report. In February, new CEO Bob Iger announced that the company would no longer provide subscriber projections, aligning Disney with a similar decision made by Netflix. This shift in focus from sign-up numbers to profitability reflects the changing priorities of Wall Street investors.
To counter the subscriber shortfall, Disney has sought strategic partnerships to expand its customer base, the report said. A recent deal with Charter Communications Inc., the second-largest cable provider in the U.S., will bundle Disney+ with the Spectrum TV service, potentially adding millions of new subscribers.
During its most recent earnings presentation, on Aug. 9, Disney said that Disney+ had 146.1 million subscribers globally as of the latest quarter, which is 7.4% fewer than the 157.8 million it had in the previous quarter.
Despite the number of subscribers falling, the firm announced plans to raise monthly fees on Disney+ and Hulu, crack down on password sharing and create a super app for content. These moves suggest that Disney may be shifting its focus toward higher-value customers, PYMNTS reported Aug. 13.