Disney’s era of budget-priced streaming video packages and galloping subscriber growth has come to an end. For the second time in about a year, Disney announced a round of major price increases to its various streaming products, raising the cost of the ad-free versions of Disney+ and Hulu by more than 20% each, according to The Wall Street Journal.
The price increases come as the company earlier Wednesday said its streaming business lost far less money in the latest quarter than it did in previous periods, but reported that its flagship Disney+ streaming service lost domestic subscribers for the second quarter in a row.
The company also raised prices on its Hulu Live television packages and announced the launch of a new bundle known as the Duo Premium, which pairs Disney+ and Hulu without ads for $19.99 a month. Previously, the company had offered both services as stand-alone products, or bundled with ESPN+ for the same price.
Since launching Disney+ in late 2019, the company has lost more than $10 billion in its direct-to-consumer segment, which also includes Hulu and ESPN+. And for much of the past year, Disney’s shares have traded below $100 as investors have grown impatient with media companies such as Disney that have spent heavily to acquire subscribers without giving priority to profit.
The NY Times reports an 11 percent increase in profitability at Disney’s theme park division — despite unusual weakness at Walt Disney World in Florida — allowed the company to salvage the quarter, to a degree. Companywide revenue totaled $22.3 billion, a 4 percent increase from a year earlier; analysts had expected slightly more. About $2.7 billion in one-time restructuring charges resulted in net loss of $460 million, compared with $1.4 billion in profit a year earlier.
Disney+ will begin cracking down on password-sharing in 2024 in an effort to drive monetization, Disney CEO Bob Iger said on the company’s third-quarter earnings call on Wednesday. “We are actively exploring ways to address account sharing and the best options for paying subscribers to share their accounts with friends and family,” he said. “Later this year, we will begin to update our subscriber agreements with additional terms and our sharing policies. And we will roll out tactics to drive monetization sometime in 2024.”
“While linear remains highly profitable for Disney today, the trends fueled by cord-cutting are unmistakable. As I’ve stated before, we’re thinking expansively and considering a variety of strategic options,” CEO Bob Iger said during his opening remarks. “However, we’re fortunate to have an array of extremely productive television studios that we will rely on to continue providing exceptional content for audiences well into the future.”
Linear wasn’t included by name as one of the three main businesses that CEO Bob Iger highlighted during the beginning of the earnings call. The Wrap reports those three businesses, which Iger noted “will drive the greatest growth and value creation over the next five years,” were the company’s film studios, parks and businesses and streaming. But while addressing the “practical considerations” of separating linear assets like ABC or National Geographic from ESPN and direct-to-consumer platforms like Hulu, Iger elaborated on linear’s role in the company’s current structure.
Walt Disney is cutting its content budget for the year by $3 billion, CEO Bob Iger said Wednesday on the company’s third-quarter earnings call, in part because of the ongoing WGA and SAG-AFTRA strikes. “We currently expect fiscal 2023 content spend to come in at approximately $27 billion which is lower than we previously guided due to lower spend on produced content, in part due to the writers’ and actors’ strikes,” Iger told Wall Street analysts.
The notion of cost savings due to the ongoing production stoppage has been a sensitive topic. No company wants to be seen as benefiting from the cost savings in halted work. At the same time, all media companies have faced pressure from investors to rein in content budgets that ballooned during the streaming wars.
No comments:
Post a Comment