SAN FRANCISCO – Disney’s streaming service has attracted nearly seven million new subscribers, the company said on Wednesday, reversing a period of decline that had raised doubts about its rivalry with industry leader Netflix.

Disney has been under significant pressure ever since chief executive Bob Iger left the company, only to be brought out of semi-retirement a year ago after his replacement no longer had the confidence of executives and the company board.

Upon his return, Mr Iger embarked on a cost-cutting campaign that saw major cuts to the lavish spending to get Disney+ off the ground.

Those efforts saw Disney’s streaming losses contract to US$387 million (S$525 million) in the most recent quarter, down from US$1.47 billion a year earlier.

Disney+ clients rose to 112.6 million at the end of September from 105.7 million at the end of June.

Disney rival Netflix in October said subscriber numbers grew nearly 11 per cent to 247 million as it cracked down on password sharing and refined an ad-supported tier.

The leading streaming service increased prices on some of its plans, perhaps creating an opportunity for competitors such as Disney.

“Our results this quarter reflect the significant progress we’ve made over the past year,” Mr Iger said, pointing to the success of Disney+’s recently added ad-supported tier.

“While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again,” Mr Iger said.

The solid quarter may bring back confidence in Mr Iger, who had begun to face criticism for his once-celebrated decisions such as paying massively in 2019 to buy 21st Century Fox from Mr Rupert Murdoch.

Cutting costs

In the past year, the Disney share price has slumped around multi-year lows.

Activist investor Nelson Peltz has turned the heat on Mr Iger, asking him to cut costs.

In the results released on Wednesday, Disney said the company was pushing to cut costs by US$7.5 billion, an increase from a previous pledge of US$5.5 billion.

In all, the entertainment giant posted sales of US$21.24 billion for the period, up slightly from the previous year.

Disney in October said it will become the sole owner of Hulu, which it already markets in subscriptions that include its own Disney+ service and the ESPN+ sports content streaming platform.

Hulu is Disney’s arm for adult-focused programmes such as The Handmaid’s Tale, while family content falls under Disney+, launched four years ago.

Both services, like their competitors, were hit by a historic writers’ and actors’ strike this summer.

Hollywood’s scriptwriters signed a deal with the studios and are back on the job, but the actors are still not back on set, resulting in a huge backlog of Hollywood productions.

“I can only say that I’m optimistic that we’ll figure that out relatively soon,” Mr Iger told CNBC after the earnings release.

In addition to content and subscriber numbers, Disney is trying to improve its profitability.

The group posted net earnings of US$264 million. AFP