What's Happening?
Disney's stock experienced a decline after the company faced significant backlash due to the suspension of 'Jimmy Kimmel Live!' in September. The suspension was a response to comments made by Kimmel regarding a high-profile shooting, which led to a wave
of subscription cancellations across Disney+ and Hulu. According to data from analytics firm Antenna, churn rates for both platforms doubled from August levels, with Disney+ cancellations rising to 8% and Hulu to 10%. This reaction was not only from viewers but also involved celebrities like Cynthia Nixon and Howard Stern, who publicly canceled their subscriptions. Despite the cancellations, Disney+ and Hulu saw an increase in sign-ups during September, indicating that the platforms' content continued to attract new viewers.
Why It's Important?
The incident highlights the sensitivity of media companies to cultural and political issues, as well as the rapid impact such events can have on subscriber numbers. The backlash underscores the challenges Disney faces in balancing content decisions with audience expectations. The increase in churn rates could affect Disney's revenue and market position, especially as the company plans to raise streaming prices in October. This situation also illustrates the power of celebrity influence and social media in shaping public reactions and consumer behavior. The outcome of this backlash could influence how media companies handle similar situations in the future.
What's Next?
Disney plans to implement price hikes for its streaming services starting October 21, which will test the loyalty of its subscribers following the recent controversy. The company will need to carefully manage its content and pricing strategies to mitigate further subscriber loss. Additionally, Disney's response to this incident may set a precedent for how it handles future controversies. The company's ability to recover from this backlash and maintain subscriber growth will be closely watched by investors and industry analysts.
