Summary
- Disney is facing a lawsuit from investors who accuse the company of lying about its losses related to Disney+ streaming service.
- The investors claim that Disney concealed the true extent of Disney+’s losses and falsely stated that the platform would turn profitable by the end of 2024.
- The lawsuit also alleges that Disney’s former CEO, Bob Chapek, used tactics like airing Disney+ originals on the Disney Channel to create a false impression of success.
Disney is being sued by some of their investors, who allege the company lied about its losses pertaining to their streaming service, Disney+. The platform, owned entirely by Disney, includes most movies and TV series made by the company, including massive blockbuster brands like the Marvel Cinematic Universe and Star Wars. However, the service has seen some recent hardship this year, starting with Disney+ losing 4 million subscribers in the first three months of 2023.
Now, The Hollywood Reporter and Deadline have revealed Disney is being sued by some of its investors for allegedly hiding Disney+ losses from them. The lawsuit claims Disney is lying about being able to achieve profitability with Disney+ by the end of 2024. In particular, they claim the company’s former CEO, Bob Chapek, aired Disney+ originals like The Mysterious Benedict Society on the Disney Channel to make the platform seem more successful than it is.
What Disney’s Investor Lawsuit Means For Disney+
Disney+ has gone through many changes in 2023, including a price increase by $3 and announcing a password sharing crackdown will happen in 2024. Recently, The Spiderwick Chronicles was cancelled by Disney+ alongside other completed or near-complete series they’ve decided not to air. This decision follows a wave of content being removed from both Disney+ and Hulu for cost-cutting measures, including originals like the Willow TV show and The One and Only Ivan unavailable elsewhere.
The new lawsuit against Disney appears to be aimed at Chapek’s decision to push a massive amount of resources into streaming, causing unprecedented internal restructuring in the process. It also underscores the idea that Disney+ won’t be a profitable pursuit for Disney by 2024 as Chapek originally planned. This could put the streaming platform’s future in jeopardy, depending on how the lawsuit plays out.
For now, it’s unclear how Disney’s investor lawsuit will impact the company and its streaming endeavors going forward. However, it does bring to light how Disney+ is still not profitable for Disney despite expensive series like Secret Invasion and Ahsoka being created exclusively for the platform. It’s possible this new lawsuit about Disney+ could have an impact on how the streaming service operates moving forward as well.
