Disney+ Wins

As The Walt Disney Company’s prospects started to fall apart last year, the company brought back former CEO Rober Iger. One of his jobs was to get people to pay more for Disney’s streaming services which were losing billions of dollars. It needed to raise rates to remedy this. Investors feared higher money prices would drive away subscribers. They did not.

According to new research from Antenna, Disney+ subscribers were hit with a $3-a-month increase. They could accept the charge, move to the Disney+ ad-supported service, or leave. “Antenna found that 94% of Disney+ Premium plan Subscribers took the price increase, 5% canceled, and less than 1% of existing subscribers maintained their current cost by switching to the Ad-supported plan.” That could take Disney’s streaming services from a huge loss to a profit.

When Disney reported earnings on November 23 of last year, former CEO Bob Chapek faced the fact that the company lost $1.5 billion on streaming. That nearly doubled from the same quarter the year before. Disney+ was doing well as it gathered 12.1 million new subscribers. That took its total to 164.2 million. While that is below Netflix’s 220 million, the Disney number has grown remarkably since the service was announced in November 2019.

Disney+ has the advantage of a remarkable content library. It includes Disney’s shows and those of several divisions. That includes Pixar, Star Wars, and Marvel. In the most recent quarter, the streaming service still lost money. And its growth in subscribers dropped slightly to 161.8 million. (These are the most profitable movies of all time.)

Iger took a chance when he raised rates. The board brought him back to solve Disney’s growing problems. He has a new win on his hands. His gamble paid off and paid off remarkably well. (These are the cheapest streaming services in America.)

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