Walt Disney Co shares fell more than 8% on Thursday as a surprise drop in streaming subscribers fanned worries that the media and entertainment company's success in stemming losses at the business may be coming at the cost of growth.
"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 Brandon Nispel, analyst at KeyBanc Capital Markets. In the second quarter, the Disney+ service shed about 4 million subscribers, compared with estimates for net additions of 1.3 million, according to Visible Alpha.
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