Disney+ and Hulu raised subscription rates yet again
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Disney’s latest price hikes for ad-free Disney+ and Hulu plans, as well as the Hulu live TV packages and EPSN+ subscriptions, went into effect on October 12. This was the second time they’ve raised prices this year. Ad-free Disney+ is now $13.99, raised from $10.99. It originally cost $6.99/month. Hulu’s ad-free plan is now $17.99, which is a $3 increase. The live Hulu TV packages will go up $7/month and EPSN+ is increasing to $10.99/month. Whew.
So why is Disney raising prices yet again? Apparently, the company is reporting big fiscal losses and a decrease in subscribers. Disney park ticket prices are also lagging, probably because it now costs more than a monthly car payment for a family of four to visit Disneyland for just one day. So sure, when people stop going to your theme parks because they can’t afford it anymore, why not take it out on them by raising prices on your streaming services? Oh, wait! What’s that you say? Disney’s stock is at a nine-year low and investors are mad? Ooooh, okay, now this makes a lot more sense.
Disney reported streaming losses that totaled $512 million in its fiscal third quarter results — about half of the $1.1 billion loss reported in the prior-year period and less than the $777 million loss forecast by analysts. The company reported a streaming loss of $659 million in Q2 and a $1.1 billion loss in Q1.
Despite the narrowing loss, the company continues to shed subscribers. The media giant reported 146.1 million total Disney+ subscribers at the end of its latest quarter, a 7.4% decline from the previous quarter. Analysts polled by Bloomberg had expected to see paying users total 154.8 million.
The majority of its subscriber losses came from its Indian brand Disney+ Hotstar, which saw users drop by 24% on a sequential basis. Disney said Hotstar is not material to the company due to its lower average revenue per user, or ARPU.
Domestic users, however, which include those in the US and Canada, dropped by 1%.
In addition to streaming headwinds, the company’s parks business is slowing, its linear TV division is declining, and the media giant’s box office also seems to have lagged competitors. Iger has committed to several new initiatives to help realign the business — from putting Disney’s linear assets up for sale and searching for a strategic partner for ESPN’s streaming offering to partnering with sports gambling company Penn Entertainment (PENN) and recently raising theme park prices.
But that might not be enough to satisfy investors with the stock sinking to a nine-year low last week. Late Sunday, the company faced renewed pressure from activist investor Nelson Peltz, who launched yet another attack on the media giant.
According to sources familiar with the matter, Peltz will seek multiple board seats, including one for himself, after his hedge fund Trian Fund Management boosted its stake in the company, which is now valued at a reported $2.5 billion for more than 30 million shares.
I’m not an economist, and my basic understanding of supply and demand is generally, “Everything is expensive because CEOs like having yachts.” I’m not sure the reaction to losing customers who didn’t want to pay for the first price hike is to raise prices again, but what do I know? I’m just a consumer, budgeting for a family of four every month. I am always skeptical whenever I hear of a company suffering “big losses,” because I know big businesses will pull some shady sh– for tax breaks. John Cusack had a great Twitter thread at the beginning of the SAG-AFTRA strike, talking about how studio execs used a “neat accounting” trick” to declare Say Anything a financial failure.
We cut cable back in February 2014 and have all of the big streaming services (Netflix, Hulu, Paramount+, Max, Disney+, and Apple TV+). We took advantage of their various deals and paid for a year up front, but now that most of those have ended, it’s starting to become too much. All of these streaming subscriptions added up are probably just as much if not more than cable packages were back in the day. Lately, we’ve been talking about which ones to cut. I think the top three on our chopping block are Hulu, Netflix, and Max. It’s a shame because I do think each streaming service has good original and back content to offer viewers, but greed and the almighty stockholders always win out in the end.
The greed is almost a legendary comic trope – one fun fact – when I was a youngin- I did a film (with a boom box ) and somehow I got points – net not gross.
Never expected to see any money – but the film became quite famous – so about 10 years ago – I looked again at… https://t.co/ad1FX7oCNa
— John Cusack (@johncusack) July 14, 2023
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