Walt Disney Co shares ended down more than 8% on Thursday as a surprise drop in streaming subscribers fanned worries that the media and entertainment company could be sacrificing growth in its bid to stem losses.
"Disney+ is losing less money not because it's gaining subscribers but because of its price hikes and better cost management," said Mike Proulx, an analyst at Forrester.Operating losses at the streaming unit narrowed by $400 million in the second quarter from the previous three months, helped by a price hike last December in the U.S. and Canada.
"Some investors might question this tactic given Disney just lost subscribers," said KeyBanc Capital Markets analyst Brandon Nispel. The losses were driven by an exodus from the South Asia-focused Disney+ Hotstar offering after it lost the streaming rights to the Indian Premier League cricket matches.
"Investors understand that Hotstar customers don't generate as much revenue but the loss was unexpected and growth outside of India was anemic," said Paul Verna of Insider Intelligence.
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