Following a call by Barclays to Walt Disney to bring in bold changes in the media giant to pose a turnaround for the slowing growth of the company’s Disney+ streaming service, the stocks of the company saw a rare downgrading at the Wall Street.

Hints of a slowdown in Disney+ were mentioned last month by Disney Chief Executive Officer Bob Chapek who forecast that the growth in the paid subscribers of the services globally for the fourth quarter will be in “low single digit” millions compared to an increase of 58.5 million in the previous three months.

The launch of Disney+, which possesses one of the richest portfolios of media content, in 2019 was very successful as the streaming services very easily managed to attract millions of subscribers with its hit “Star Wars” and “Avengers” franchises.

However, a different approach to attract paid subscribers has been adopted by its rival streaming platforms such as Netflix Inc, Apple TV+ and Amazon Prime Video. All of the  services have made huge investments in creating original content to draw in paid subscribers.

“While the company (Disney) appears to be targeting one new piece of content a week, not every piece of content has the same franchise value or visibility,” Barclays analyst Kannan Venkateshwar said.

A pull forward in additions in 2020 cannot be identified as the sole factor for the current slowdown in Disney+ subscribers, Barclays also said. In 2020 during the height of the Covid-19 pandemic, almost all video streaming platforms and services gained immense popularity as consumers were forced to stay back home and seek entertainment at home because of the restrictions imposed to prevent the spread of the pandemic.

According to Barclays, it will be imperative for Disney to more than double its current speed of growth to at least the same level as Netflix, if the company wants to achieve its previously stated target of garnering 230 million to 260 million Disney+ subscribers by the end of fiscal 2024.

At the end of the quarter ended June, there were 209 million paid subscribers for Netflix, which is considered to the pioneer of the video streaming industry, whereas Disney+ had only 116 million paying customers at the same time.

Disney shares, which have not been downgraded by any brokerage so far this year, fell about 2 per cent in early trading.

(Adapted from Reuters.com)