Walt Disney Studios has long been a powerhouse in the entertainment industry. It has strong cross-media influence that spans over-the-air television, streaming, theme parks and events, video games, and merchandising. But even giants stumble sometimes, and Disney has encountered several bumps in its path for multiple aspects of its core businesses. Theatrical hits aren’t hitting as high; streaming has become crowded and competitive as free, ad-supported channels and premium streaming services have proliferated the market; and park attendance has dipped.
The venerable studio has lately struggled to find box office success. Recent high-profile releases from their major tentpole studios – Walt Disney Pictures (The Little Mermaid live-action remake), Marvel Studios (Ant-Man and the Wasp: Quantumania), Pixar (Elemental), and Lucasfilm (Indiana Jones and the Dial of Destiny) – have failed to meet expectations, falling short of the $1 billion global threshold that so many of their blockbusters reach. Comparatively, they had three movies surpass $1 billion in 2022 (Doctor Strange and the Multiverse of Madness, Black Panther: Wakanda Forever, and Avatar: The Way of Water).
Disney has also been experiencing woes on the streaming side as the streaming wars move towards maximizing profitability. Like other streamers, Disney has purged content from Disney+ as a cost-cutting measure – including original series like Willow and The Mighty Ducks: Game Changers and original movies like Artemis Fowl. It follows a string of other high profile streamers removing content from their platforms as the streaming war casualties mount – most notably at Warner Bros Discovery’s Max and Paramount+.
Interpret VideoWatch data shows that Disney+ subscribers declined year-over-year after showing growth last year. At the same time, Netflix exhibited subscriber growth. Brand loyalty for Disney+ subscribers also trails Netflix, Hulu, and Max (formerly HBO Max). While 61% of Disney+ subscribers rank Disney+ in the top three services they feel “most loyal to and most determined to keep subscribing,” this is low compared to how Netflix subscribers (89%) and Hulu subscribers (75%) feel about those platforms.
Accompanying the decline in movie attendance and streaming has been an apparent slowdown in theme park visitation. Investment advisors recently downgraded Disney stock over concerns about streaming and underachieving theme park attendance.
While Disney’s challenges are not insignificant, the company is still operating from a position of strength and is well-positioned to address these issues. Stock prices went up with the announcement of the renewal of Bob Iger as CEO through 2026, giving the company some stability in leadership. More importantly, the library of content that Disney has from Walt Disney Pictures, Marvel, Pixar, and Lucasfilm remains stellar.
Disney+ originals scored 40 Emmy nominations (out of Disney Entertainment’s 163 total nominations across all its brands and studios), including some in the premium categories of Outstanding Drama Series (Andor), Outstanding Limited or Anthology Series (Obi-Wan), and Outstanding Television Movie (Hocus Pocus 2). They also continue to produce in-demand content. Their summer slate includes highly anticipated titles from Marvel (Secret Invasion,) and Star Wars (Ahsoka), with a full streaming and theatrical slate planned for 2024 and beyond that includes new originals from all their major studios. There will be plenty of chances for Disney to get back its box office mojo.