Disney’s CFO says the company ‘earned’ its latest streaming price hike

The Walt Disney Company announced yesterday that it will soon raise prices for Disney+, Hulu, and ESPN+. Today, She revealed that her live streaming business has become profitable for the first time.

If Disney was starting to make money, why did they decide to raise prices?once again?

Disney says it ‘deserved’ higher prices

On October 17, prices for ad-free and ad-free subscriptions to Disney+, Hulu, and ESPN+ will increase by up to 25 percent, depending on the plan (you can see details of the price changes here). The pending price increases follow price increases for the platforms coming in October 2023 and August 2022.

During Disney’s third-quarter 2024 earnings call today, CFO Hugh Johnston said (according to Quoted from Motley Fool) He said Disney has earned the right to charge more for streaming services, citing the availability of current and upcoming content:

We feel we have earned this price in the market, and we are positive about it. This will lead to significant benefits. Product improvements should reduce customer churn and keep our customers with us as they evaluate their options.

Disney CEO Bob Iger said the company has increased “pricing leverage” on its streaming service with upcoming features like live channels and new movies.

Like Disney, like Other broadcasting worksAs Facebook looks to shift focus from growing subscriber numbers to other factors, like user engagement — or the amount of time users spend on the service, which can help companies’ advertising business — and profit margins, it may be more aggressive in making moves that could cost some subscribers (more on that in a moment).

When asked about customer reactions to the recent price hike, Iger said:

We’re not worried. The goal is to increase engagement on the platform. And what I mean by that is to offer a variety of programs.

Disney says it didn’t lose many customers due to previous price hikes

Although price hikes across streaming platforms have prompted web subscribers to announce cancellation plans and encourage others to cancel, Iger claimed that “every time we’ve increased prices, we’ve only had a modest reduction from that, and it’s not something we consider significant.”

One of the biggest business challenges facing streaming companies right now is high churn rates. But other reasons for rapid churn — such as subscribers watching their favorite content and then unsubscribing until the platform adds new, desirable content — may be more pressing for Disney than the frequent price hikes that have become common among streaming services.

Iger also claimed that Disney has not seen much backlash to the password-sharing campaign the company began implementing earlier this year and will continue “in earnest” in September.