Disney plans more Hulu, less cricket. That’s probably good for the stock.

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Walt Disney doesn’t seem to be pleasing the market with its streaming plans. Last year, investors did not like the losses caused by its content investment. Now they don’t like the decline in subscriber numbers as a result of its efforts to control those costs.

Disney shares fell by more than 8 percent on Thursday.

Like Disney (ticker: DIS ) said Wednesday night that Disney+ subscribers unexpectedly fell in the first quarter. This was mainly due to the departure of Indian customers after that

Disney

(ticker: DIS) lost streaming rights for cricket in the country, which was expected after it pulled out of the bidding process last year after the price became too expensive.

This cost control effort likely bodes well for Disney’s finances going forward. With average monthly revenue per paying Disney+ subscriber up 13% in the second quarter and more price increases planned, the benefits should start flowing to the income statement, which will have a positive impact on the stock price.

Of course, Disney still needs content to keep subscribers engaged. That explains why CEO Bob Iger said it will make Hulu content available on Disney+ in the US by the end of the year.

Analysts at

UBS

said the move dispelled any doubts that Disney was planning to take 100 percent control of Hulu. Disney currently owns two-thirds of the streaming service, while Comcast ( CMCSA ) owns the rest. Hulu’s minimum value, which the owners have previously agreed to, is $27 billion, meaning Disney would have to pay at least $9 billion for a piece it doesn’t already own.

That might not sound like a lot of cost-cutting, but unlike the cost of Indian cricket streaming rights, Disney is able to control the costs associated with Hulu. UBS believes Disney could achieve more than $2 billion in cost savings if it bought all of Hulu by reducing content and merging its advertising and technology operations with its own.

Disney stock’s pain may continue for some time. Analysts at Macquarie Research noted that company executives indicated that domestic Disney+ subscribers could fall again in the current quarter, before rebounding in the company’s fiscal fourth quarter in response to content releases like the second. character movie on the platform.

Macquaries analysts advise patience, maintaining an Outperform rating on Disney stock. We believe Disney has the necessary assets to successfully move into streaming, but it will be a multi-faceted effort, Macquarie analysts wrote.

Write to Adam Clark at [email protected]