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Does Subscriber Count Still Matter To Streaming Services?

Photo by Glenn Carstens-Peters on Unsplash

Does Subscriber Count Still Matter To Streaming Services?

By Movieguide® Contributor

In the ever changing landscape of streaming services, it’s hard to calculate a platform’s success. Does the number of subscribers still spell success for a streamer?

Mainstream outlets recently argued that high subscriber numbers don’t equate to a company’s success.

Variety reported that, despite steadily adding subscribers to their Disney+ platform, Disney stock is down more than 30%.

Movieguide® previously reported on Disney+’s numbers:

Disney+ rocketed to 100 million subscribers from Nov. 2019 to March 2021. However, Wall Street analysts say the streaming platform’s numbers in 2021 could mean a slower climb than anticipated.

The company reported 8.7 million Disney+ subscribers over the first three months of 2021, nearly 6 million fewer than Wall Street predicted.

Research analysis firms like Digital TV had previously expected Disney+ to surpass Netflix in total subscribers by 2026. Although Morgan Stanley analyst Ben Swinburne “remains confident” that Disney’s forecast of 230 million to 260 million subscribers by the end of fiscal 2024, the curve could appear more gradual than previous estimates.

“It was clear at Disney’s December 2020 investor day that the content quantity would be more modest in F21 given COVID’s impact on production,” Swinburne wrote. “The key titles and quantity of key titles really begin in F22 in earnest, building further into F23.”

On the other hand, Disney’s stock went back up 15% after an earnings report announced they had added 15.5 million subscribers. 

Netflix’s subscribers are also increasing — and their profits are, too. 

While the numbers don’t lie, streaming services are shifting to focus on the subscribers they already have instead of trying to add more users. 

Movieguide® previously reported on Netflix’s plans to increase revenue without adding more subscribers:

Netflix plans to launch an ad-supported subscription option with Microsoft in early 2023 so the company can reach a broader customer base.

“We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising,’” Netflix Co-CEO and Chief Content Officer Ted Sarandos said during a panel at the Cannes Lions Festival.

This announcement comes after major subscriber losses over the last two quarters. In the second quarter, Netflix lost nearly 1 million subscribers.

While this was only half the expected loss, CEO Reed Hastings explains that “our excitement is tempered by the less bad results.”

Sarandos explains, “We adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.’”

People reports that “as Netflix increases subscription prices, the platform sees an opportunity for lower subscription fees, if a patron is willing to watch ads.”

Other streamers are taking note, from HBOMax to Paramount+. It looks like the total number of subscribers no longer matters when it comes to high earnings for streamers.