Disney raises prices on its streaming services after registering losses of 1,100 M in that segment

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As of December 8, Disney+ customers in the US will have to pay $10.99 per month to view content on the platform, at least if you don’t want to see ads. That means three euros more than the current price, an increase of 38% that makes a hole under the new modality with advertising, which inherits the cost that the regular subscription had until now. The other two Disney streaming services have similar increases: 15% and 14% in the versions without and with Hulu advertising; and 43% on ESPN+, as announced last month.

This new price structure responds to the intention of reducing the constant losses that the commitment to streaming is causing in the entertainment giant in a context of skyrocketing costs. Only in the second quarter (third in your fiscal year) the set of services has caused 1,100 million in negative, 300 more than what the average of the analysts estimated. The growth of the user base has only partially alleviated this circumstance since, for example, Disney+ has seen the average revenue per customer in the US-Canada fall by 5% due to the fact that more and more people are opting for cheaper combined offers in a scenario of intense competition and family budgets hit by inflation.

Disney + will cost 38% more while Hulu and ESPN + will increase rates by 14-15% and 43%, respectively.

It remains to be seen how the rise in rates in the domestic market influences that figure, something that Netflix already did a few months ago with negative consequences. Both companies dispute the primacy in streaming and for the first time Disney surpasses its rival in the number of clients when adding all of its services. At the end of the reference period it had 221 million subscribers, for Netflix’s 220.7 million. Most of them are contributed by Disney +, up to 152.1 million, which improves last year’s figure by 31% thanks to the international expansion to which it owes a large part of the 14.1 million registrations in the quarter.

In any case, the forecasts are less promising than a few months ago after the loss of the rights to broadcast the Indian cricket league in streaming. Disney+ Hotstar, as the service that operates for that country and others in the area is called, provides 38% of the platform’s global subscribers and the company expects to lose some of them due to this circumstance. That explains why it has reduced its total subscription forecast for 2024 from 230-260 to 215-245 million. By the end of that year, the entertainment giant expects its main streaming service to be profitable.

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