Disney+ Cancel Rate at 18%

Add to Disney’s long list of problems that Disney+ is among the most canceled streaming services based on data from Vorhaus Advisors, according to Yahoo! Finance. The study shows the rate at 18% of total subscribers. About 2,000 people over 21 were queried. The questionnaire covered three months. (Customers are abandoning these 25 brands.)

Netflix posted numbers even worse than Disney, with a figure of 37%. However, Netflix makes money. Disney’s streaming services have lost billions of dollars since they were launched. Disney+ started in November 2019.

Disney’s streaming business grew quickly. Subscribers for Disney+ topped 150 million recently. As of the last reported quarter, that number is slipping. Disney+ was launched for $6.99, which was almost certainly too low to make a profit. Disney traded margins for growth. It has raised rates, but this could cause many subscribers to cancel. In other words, higher rates are no guarantee of better margins if cancellation rates are high.

Disney+ also has an army of competitors. Netflix and Amazon are at the top of that list. They have many more subscribers than Disney. Both companies have been in the market much longer than Disney. Due to this competition, Disney’s streaming financials will not be guaranteed to improve.

Disney does not need another division that is in trouble.

Whether Disney has other problems is a matter of debate. Anecdotally, attendance at its U.S. theme parks has been dropping, perhaps because of high prices. Whether price reductions by Disney will help is too hard to tell.

Certainly, its legacy businesses like ABC face the struggles that all businesses in the sector do.

Finally, strikes by actors and writers will harm Disney’s movie studios. It is a final but terrific hit.

In the past few days, the media has attacked the succession play that brought back former CEO Bob Iger. The company’s results since he returned may show how badly he misjudged his magic.

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