Disney+ Cost the Company More Than $11.4 Billion in Operating Losses Due to Bad Business Decisions

Disney Might Edit Anime Series for Global Releases on its Platform
Share:

Disney+, Disney’s official streaming service, is one of the biggest players in the market. And while Netflix is the undisputed streaming champion, Disney+ is doing solidly along with its main competitors, HBO’s Max and Amazon’s Prime Video. But, while Disney+ has a large library and a lot of original content, the company’s finances are not as good, and it seems that Disney+ is actually accumulating losses for Disney. This information comes from a recent analysis made by Forbes, in which the causes of this issue are analyzed, and we have decided to report on the state of things at Disney at this time.

Disney+ was officially launched on November 12, 2019, as a new streaming service on the market and has since become one of the largest services, which shouldn’t come as a surprise, seeing how Disney has one of the largest libraries of all the services and is constantly providing its users with original and exclusive content. Despite this, the service is still gathering losses, and it is debatable whether Disney will be able to make a profit this year.

When Disney+ originally launched, the streaming service had a lot of success, and the revenues were amazing, which resulted in an increase in Disney’s stock value at the time. The moment was perfect. Disney immediately launched a massive library that contained almost a century of movies and series, with new original content coming in all the time. It also launched during the COVID-19 pandemic, when access to theaters was limited, so naturally – demand was high at the time.

Disney’s then-CEO Bob Iger left Disney+ as a parting gift before stepping down, but it soon turned out that his successor did not do as well. Drunk with the initial success of the service and disregarding that the pandemic ended (and that fans wanted to go to the cinema), Disney pumped billions of dollars into its original, streaming-exclusive content, which was a bad move from a business point of view.

Regardless of the controversies surrounding the shows, Disney+ has a lot of subscribers and viewers, but not enough to merit so much spending. The content on other services increased, and with the pandemic now a thing of the past, people finally went out and, of course, the money stopped coming in.

It seems that Disney was simply too greedy for its own good and that the company ended up being blinded by its own greed. They invested too much money into streaming thinking that the money would keep pouring in, but that did not happen and now the company is being faced with enormous losses, not because their content is bad, but because their business decisions have been horrible.

Disney experienced more than $11.4 billion of operating losses due to its streaming investments, and the company recently had to cut $7.5 billion in costs, which included a lot of original streaming content, as it simply did not make sense to spend so much money on streaming at this point.

Disney never managed to surpass its competition, let alone Netflix, and while they are an important player in the market, their income doesn’t justify such spending, so it is obvious that something will need to change. This is just another thing that Disney will have to change going forward, as we have recently reported on Disney’s theatrical release policy, which will also have to go through some major changes in the future.

Have something to add? Let us know in the comments below!

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments