What reasons did Disney executives give for the 2025 Disney+ subscriber decline?
Executive summary
Disney executives said the Disney+ subscriber decline in early fiscal 2025 was an anticipated, “modest” churn tied to deliberate price increases and the company’s push toward streaming profitability, and they framed the loss as manageable while pointing to broader changes in how they will measure streaming performance going forward [1] [2] [3] [4].
1. Iger and Johnston: the decline was expected and modest, not a catastrophe
On the company’s earnings call and in written commentary, CEO Bob Iger and CFO Hugh Johnston described the roughly 700,000-subscriber drop as modest and in line with prior warnings that the company expected a “modest decline” in core subscribers for the quarter, and Iger said the churn “wasn’t as bad as expected,” signaling the quarter’s result fit management’s expectations rather than representing an unexpected failure [1] [2] [5].
2. Price hikes and a profitability-first strategy were central to the explanation
Executives repeatedly tied the loss to deliberate price increases and a shift in priorities toward profitability, arguing higher subscription prices and ad products were tools to push Direct‑to‑Consumer toward positive operating income — a strategy they say justifies some short-term subscriber erosion in service of stronger margins and ARPU growth [3] [6] [7].
3. Changing how success is measured — subscribers and ARPU are “less meaningful”
Beyond attributing churn to pricing, Disney leaders explicitly signaled a strategic pivot in reporting: they argued that quarterly paid‑subscriber counts and ARPU have become “less meaningful” as the business evolves, and announced plans to stop disclosing those metrics in favour of profitability and engagement reporting — a move presented as aligning financial disclosure with how management now runs the streaming businesses [4] [8] [9].
4. Executives pointed to structural and accounting shifts that affect headline figures
Disney’s public materials and coverage noted that earlier structural moves — including the separation of Disney+ Hotstar-related subscribers tied to the company’s India reorganization — have already changed the baseline for reported global subs, complicating quarter‑to‑quarter comparisons and contributing to how management frames subscriber swings [10].
5. Critics and analysts countered: price sensitivity and content gaps likely drove churn
Independent analysts and some business reporters rejected a purely benign framing, saying the dip suggests price hikes and content shortfalls may be driving churn amid fierce competition from Netflix and Amazon — a counterargument Disney executives acknowledged implicitly by emphasizing profitability and management’s expectations but did not concede as the primary fault line [7] [6]. Alternative coverage characterized executive comments as damage control or spin, noting another modest decline was forecast for the next quarter [3] [5].
6. The broader industry precedent and incentive to stop reporting subs
Disney cast its reporting change as following industry precedent — notably Netflix’s 2024 pivot away from quarterly subscriber disclosure — and framed it as an effort to shift investor focus from raw scale to revenue quality, engagement and profitability, an implicit admission that subscriber counts are a blunt and increasingly unhelpful measure for its evolving ad‑and‑tiered revenue model [8] [4].
7. Bottom line: executives justified the decline as part of a chosen trade‑off, but left critics room to argue otherwise
Management’s explanation boils down to a deliberate trade‑off: accept some near‑term subscriber losses driven by price increases and business restructurings in order to improve margins and reshape reporting toward profitability metrics; outside observers, however, point to price sensitivity and content performance as persistent risks that the executive narrative does not fully neutralize [3] [7] [6].