The Walt Disney Company is raising prices for its Disney+ streaming services, even though it lost 300,000 subscribers in the United States and Canada in the latest quarter.
Disney’s third-quarter earnings report on Aug. 9 revealed a revenue plunge across the board, except at its international theme parks.
The price hike comes after Disney reported that its streaming business remains unprofitable, despite narrowing its revenue losses in the third quarter.
Disney reported quarterly revenue of $22.3 billion for the quarter, compared to expectations of $22.5 billion, according to Refinitiv.
Disney+ Raises for the Second Time in Less Than a Year
The House of Mouse’s streaming service’s ad-free subscription channel will now cost $13.99 starting Oct. 12, an increase of $3 per month.
This is the second time in less than a year that Disney has raised the price of its streaming service. In December, the company hiked the price of its ad-free service to $10.99 from $7.99.
Disney+ subscriptions fell by 300,000, to 46 million in North America, while Netflix toted about 76 million domestic subscribers in the same quarter.
A plunge in U.S. subscribers appears to be a sign for rough waters ahead, as audience numbers have stagnated over the past few quarters.
Meanwhile, the network’s worldwide subscriptions fell 24 percent for the period, mostly due to the end of Disney’s contract with Hotstar in India.
The subscriber losses are an ominous sign, as the studio continued to pour billions of dollars into new streaming content that has flopped with viewers.
Out of all of the new content in the last quarter, the only Disney+ program that made the top 15 was “The Simpsons,” which was acquired in the Fox Entertainment purchase.
Analysts say that Disney+ domestic market has likely reached its peak less than three years after the platform launched in 2019.
Disney, which also owns a majority stake in Hulu, will hike prices for the streaming service in October and will raise ad-free offering prices from $3.00 to $17.99.
A new ad-free package of Disney+ and Hulu will cost $19.99.
Disney Streaming Service to Crackdown on Password Sharing
Meanwhile, Disney CEO Bob Iger said on the quarterly earnings call that the price hikes were intended to push more Disney+ subscribers to the service’s ad-supported option.
“The advertising marketplace for streaming is picking up. It’s more healthy than the advertising marketplace for linear television,” Mr. Iger said.
Linear television revenue continued to fall in the first half of 2023, declining 7 percent compared to the same quarter last year.
The studio CEO discussed the future of Disney’s television assets, which include ABC, the Disney Channel, FX, and National Geographic.
Mr. Iger fueled speculation in an interview with CNBC last month after suggesting that some of the channels might be put up for sale.
“While linear remains highly profitable for Disney today, the trends being fueled by cord-cutting are unmistakable,” said Mr. Iger, adding, “as I’ve stated before, we’re thinking expansively and considering a variety of strategic options.”
Mr. Iger also suggested that Disney+ may follow Netflix’s path by cracking down on password sharing, which helped its rival add millions of new subscribers.
“In calendar 2024, we’re going to get at this issue,” he said regarding password policy.
“We certainly have established this as a real priority. We actually think that there’s an opportunity here to help us grow our business.”
The Disney CEO also addressed the ongoing Hollywood writers’ and actors’ strikes, after calling their moves “very disruptive” in a July interview.
“Nothing is more important to this company than its relationships with the creative community, and that includes actors, writers, animators, directors, and producers,” said Mr. Iger.
“I have deep respect and appreciation for all those who are vital to the extraordinary creative engine that drives this company and our industry.”
“And it is my fervent hope that we quickly find solutions to the issues that have kept us apart these past few months. And I am personally committed to working to achieve this result,” he concluded/
Conservative Boycott Cuts Into Domestic Park Revenues
Disney’s international parks still remained profitable, even as attendance declines at its Disney World Resort in Florida, amid fights with conservatives and the state’s Republican governor, Ron DeSantis.
Revenue at the entertainment firm’s park division, rose 13 percent to $8.3 billion for the quarter, mainly due to growth in international parks, like Shanghai Disney Resort and Hong Kong Disneyland Resort.
“The increase at Shanghai Disney Resort was due to the park being open for all of the current quarter compared to three days in the prior-year quarter as a result of COVID-19 related closures,” the company said in a statement.
However, Disney acknowledged that the division’s growth was partially offset by lower revenue at its domestic parks.
Disney’s official endorsement of the gay and transgender community is being blamed for much of the loss domestically, as conservatives boycott the studio and its theme parks.
The studio’s recent move to team up with a transgender TikTok personality to promote apparel for girls has also exacerbated the worries from parents about the troubled brand.
Seann Altman, a biological male who identifies as “gender fluid,” posted a video wearing a Minnie Mouse costume, including a red dress, yellow pumps, and a red hair bow.
This is one of the latest examples of Disney promoting transgenderism to children.
For example, Disneyland recently employed a mustachioed transvestite to welcome young girls into the park’s Bibbidi Bobbidi Boutique, Breitbart News reported in May.
Disney+ streaming service hosted in 2021: “This Is Me: Pride Celebration Spectacular,” which starred drag queen Nina West, with live performances of classic Disney songs with LGBTQ themes.
Still. the firm attributed Disney World’s lower attendance rates to fading post-pandemic demand for travel to Florida, as recent figures show a slow down in tourism to central Florida.
Orange County, which includes Orlando, collected 6.7 percent less in taxes on hotel stays in May, compared the same month last year, according to the county’s comptroller’s office.
From The Epoch Times
