Investors in The Walt Disney Company have filed a complaint against the company in California federal court, alleging Disney used a “cost-shifting scheme” to mislead investors regarding the success of Disney+ under Bob Chapek’s lead, according to The Hollywood Reporter.
- The complaint was filed on August 23rd and is reportedly at least the third taking issue with Disney’s efforts to boost Disney+ subscriptions.
- The suit claims Disney executives, including then-CEO Bob Chapek, hid the expense and difficulty of maintaining the subscriber growth of Disney+.
- Chapek said in December 2020 that “Disney+ has exceeded our wildest expectations with 86.8 million subscribers as of December 2″ and that the “success” of the platform has “bolstered our confidence in our continued acceleration towards a DTC-first business model.”
- However, last year, Disney reported that in 2021, it missed analyst estimates by wide margins on revenue, sales and earnings.
- In Q4 2022, the company’s direct-to-consumer arm, which includes Disney+, ESPN+, Hulu and Hotstar, reported an operating loss of $1.47 billion.
- The complaint also mentions the average revenue per Disney+ subscriber being lower than anticipated because of the Disney bundle:
- You can see the full filed complaint below: