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Photo by Thibault Penin on Unsplash

Mickey Mouse has won the latest battle in the streaming wars—but at a big cost.

Burbank-based Walt Disney Co. surpassed Netflix in total subscribers after signing up way more customers than expected during its most recent quarter. The strong growth helped boost the company’s share price in after-hours trading on Wednesday and signaled that the streaming market isn’t nearing saturation yet—despite the recent doom and gloom surrounding the business.

Yet Disney also lost $1.1 billion on streaming during the fiscal third quarter, much more than the roughly $300 million lost this time last year. That’s likely a big reason why the company also announced price hikes for Disney Plus—its flagship streaming service— as the entertainment giant tries to generate more revenue from the money-losing business.

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Photo by Thibault Penin on Unsplash

Netflix’s second quarter went better than expected, which is to say that it was still pretty bad.

The streaming giant lost 970,000 subscribers from April through June, the company reported Tuesday, marking the first time that Netflix lost paying customers in two consecutive quarters. Most of the losses came in the U.S. and Canada, the company’s most lucrative region in terms of revenue per customer.

Yet earnings reports are often about beating Wall Street’s expectations (even if those estimates are really low) so Tuesday was, in a bizarre way, a good news day for Netflix. The nearly 1 million fewer members is less than half of what Netflix forecasted in April, when it predicted a decline in 2 million customers. Perhaps more importantly, Netflix is predicting a rebound soon: It plans to gain 1 million customers in the current quarter.

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