Disney Shares Fall As Streaming Uncertainty Intensifies
Following Disney’s Q2 earnings call, shares of the company fell as much as 8% in trading this morning.
While Disney’s earnings showed progress in their efforts to cut costs and their streaming losses narrowed, it wasn’t enough for investors.
![Disney layoffs](https://mickeyblog.com/wp-content/uploads/2023/01/2023-the-walt-disney-company-stock-image-1-1024x505.png)
![Disney layoffs](https://mickeyblog.com/wp-content/uploads/2023/01/2023-the-walt-disney-company-stock-image-1-1024x505.png)
Photo: The Walt Disney Company
Analysts cited a weak advertising outlook and uncertainty over whether Disney’s streaming business can be profitable as potential red flags for the company.
All eyes have continued to be on Disney+, which missed its subscriber projections. While Wall Street analysts had expected the service to grow subscribers by less than 1%, Disney’s total number of subscribers instead fell 2%.
![Disney Super Bowl](https://mickeyblog.com/wp-content/uploads/2023/01/Untitled-design-26-1024x536.png)
![Disney Super Bowl](https://mickeyblog.com/wp-content/uploads/2023/01/Untitled-design-26-1024x536.png)
Photo: Chip Somodevilla/Getty Images
A New Streaming Strategy
On a positive note, the company narrowed its streaming losses by $400 million, which was down 26% year over year.
Additionally, Disney said it planned to remove content from Disney+ to cut costs while raising prices on its ad-free Disney+ tier.
![DIsney+](https://mickeyblog.com/wp-content/uploads/2023/03/disney-plus-1.jpg.webp)
![DIsney+](https://mickeyblog.com/wp-content/uploads/2023/03/disney-plus-1.jpg.webp)
Photo: DIsney+
With the announcement that Disney will be combining the libraries of Disney+ and Hulu into a “one-app experience,” the future of Disney+ is about to look very different.
The company, however, finds itself stuck between the diminishing returns of linear networks and the current unprofitability of the streaming sphere.
![Disney+ ad](https://mickeyblog.com/wp-content/uploads/2022/07/disney-plus-1024x676.jpg)
![Disney+ ad](https://mickeyblog.com/wp-content/uploads/2022/07/disney-plus-1024x676.jpg)
Photo: Newsweek
Reason For Optimism
Despite this, some Wall Street analysts remain optimistic about the company’s long-term prospects.
“The long-term profit picture should be brighter than the market knows and thus we think the stock is undervalued,” said MoffettNathanson senior analyst Michael Nathanson.
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Image: Disney
How Disney navigates the shifting media landscape will be important not just for the company’s future, but for the entertainment industry as a whole.
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