Disney (DIS) raised streaming prices on Thursday as the company continues to struggle with direct-to-consumer profitability issues and declining subscriber numbers.
The price increases, the second so far this year, affect the monthly price of the company’s ad-free Disney+ and Hulu plans, as well as its Hulu Live TV packages and its ESPN+ subscription. The company first announced the price increases in August.
As a result of the increases, the price of Disney+’s ad-free plan in the US rose to $13.99 per month from the previous $10.99. That’s now double the $6.99 monthly cost that Disney charged for the service when it launched in 2019.
Hulu’s ad-free plan increased by $3 per month to $17.99 per month. The ad-supported tiers for both services remain at $7.99 each.
Price increases will also affect Disney’s two Hulu Live TV packages, with prices increasing by $7 each for both the ad-free plan and the ad-supported offering. ESPN+ will increase by $1 to $10.99 per month.
Disney reported total streaming losses Fiscal third-quarter results came in at $512 million – about half the $1.1 billion loss reported in the year-earlier period and less than the $777 million loss forecast by analysts. The company reported a streaming loss of $659 million in the second quarter and a loss of $1.1 billion in the first quarter.
Despite the narrowing loss, the company continues to lose subscribers, with the media giant reporting a total of 146.1 million Disney+ subscribers at the end of last quarter, a decline of 7.4% from the previous quarter. Analysts surveyed by Bloomberg had expected a total of 154.8 million paying users.
The majority of subscriber losses were at Indian brand Disney+ Hotstar, which saw user numbers decline 24% sequentially. Disney said Hotstar is not significant for the company due to lower average revenue per user (ARPU).
However, domestic users, which include those in the US and Canada, fell 1%.
LONDON, ENGLAND – DECEMBER 06: Disney CEO Bob Iger attends the world premiere of “The King’s Man” at Cineworld Leicester Square on December 06, 2021 in London, England. (Photo by Dave J Hogan/Getty Images)
In addition to streaming headwinds, the company’s parking business is slowing, its linear TV division is in decline, and the media giant’s box office revenue also appears to have lagged the competition.
The story goes on
Iger has committed to several new initiatives to help refocus the business – from selling Disney’s linear assets to finding a strategic partner for ESPN’s streaming offering to partnering with sports gambling company Penn Entertainment (PENN) and the recent increase in theme park prices.
But that may not be enough to satisfy investors, as the stock fell to a nine-year low last week.
Late Sunday, the company faced renewed pressure from activist investor Nelson Peltz, who launched 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 increased its stake in the company, now reportedly valued at more than $2.5 billion Has 30 million shares.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on Twitter @allie_canalLinkedIn and email her at [email protected].
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