What's Happening?
Disney+ and Hulu saw a significant increase in subscription cancellations in September following ABC's brief suspension of 'Jimmy Kimmel Live!' due to controversial comments made by Kimmel. Antenna, a subscription analytics
company, reported that Hulu's churn rate jumped from 5% in August to 10% in September, while Disney+'s rate increased from 4% to 8%. Despite the cancellations, sign-ups for both services were higher in September than in the previous five months. Disney owns both streaming platforms and ABC, which pulled Kimmel's show off the air for less than a week.
Why It's Important?
The rise in cancellations reflects the sensitivity of consumers to political controversies and their willingness to act on perceived corporate missteps. The incident underscores the potential financial risks for media companies when involved in politically charged situations. The increase in sign-ups suggests that while some consumers reacted negatively, others may have been drawn to the platforms due to the publicity surrounding the controversy. This dynamic illustrates the complex relationship between media companies and their audiences in the current political climate.
What's Next?
Disney's response to the controversy, including the reinstatement of Kimmel's show, may help stabilize subscriber numbers. The company's upcoming earnings report will provide further insights into the impact of the suspension on its streaming business. Disney's strategy to integrate Hulu into Disney+ could also influence future subscription trends, potentially offering a more unified streaming experience to attract and retain customers.
Beyond the Headlines
The suspension of Kimmel's show and the subsequent consumer reaction highlight the broader cultural and political challenges faced by media companies. It raises questions about the role of entertainment in political discourse and the responsibilities of media companies in managing controversial content. The incident may prompt Disney and other companies to reevaluate their approaches to handling politically sensitive issues and maintaining consumer trust.
