The Walt Disney Company has made no secret of the fact that it’s betting its future on streaming TV. Hell, it just doubled down on it with a major reorganization of its business.
But after a pandemic-induced bump in streaming-TV viewing peaked earlier this year, some of the arrows for Disney’s flagship streaming service are now pointing in the wrong direction, according to a new report from analyst firm MoffettNathanson.
The percentage of viewers who stream Disney Plus on a daily basis has declined for two consecutive quarters, the firm reports, citing survey data from HarrisX. In the third quarter of this year, just 26% of viewers said they or someone in their household watched Disney Plus every day, down 300 basis points from the prior quarter, which itself was down 200 basis points from the quarter before that.
For comparison, 43% of Netflix viewers said they used the service daily in the third quarter, about the same number who said so in the prior quarter.
At just under a year old, Disney Plus has amassed an impressive base of subscribers in a short amount of time. Disney said in August the service had more than 60 million subscribers, a number doubtlessly bolstered by viewers who signed up to watch the musical Hamilton, which premiered there in July.
But as MoffettNathanson points out, premium streaming services are facing an imminent dearth of content after COVID-19 disrupted production schedules over the past several months, and Disney is not immune to these factors. The firm also estimates that 18% of Disney Plus users are getting the service through a free promotion with Verizon—and the one-year period is ending for many. To make matters worse, only 44% of users getting the service through a free promotion said they planned to continue their subscription. Another 37% said they weren’t sure while 18% said they would not.
“This continued fall in frequent usage points concerns us as Disney+ approaches the lapping of its first year promotional subs with few hours of limited content,” MoffettNathanson analysts wrote.
Disney Plus is not alone in facing some of these hurdles. The report notes that a quarter of HBO Max subscribers are getting a free ride through a promotion from parent company AT&T. And more than half of subscribers to Apple TV Plus are getting that service through a promotional offer.
Says the report, “In fact, all three services (Disney+, HBO Max and Apple TV+) remain in danger of losing momentum if they are not able to entice renewals with exciting original content in the coming months.”