Disney+ Subscriber Growth Exceeds Expectations So Higher Prices On the Way

In the first week of August, the Walt Disney Company released its fiscal third quarter report, with substantial fanfare. This is because the report indicates Disney+ subscriptions increased to 152.1 million, easily beating their original forecast of 147 million.

This is particularly impressive because the popular streaming service Hulu has only 46.2 million subscribers while ESPN has about half that, with 22.8 million.  Of course, the streaming services package of Disney+, Hulu, and ESPN+ has a combined subscription base of 221 million.  This, collectively, has surpassed the long-time streaming leader Netflix, who is down to 220 million subscribers.

Disney share value rose by more than 6 percent after the closing bell, on the heels of this news.

In an earnings call,  Disney CEO Bob Chapek commented, “We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership and significant subscriber growth at our streaming services.”

All of this is more interesting when you consider that the Disney+, Hulu, ESPN+ package actually count for a fiscal third-quarter loss of $1.1 billion.  This, apparently, reflects the higher cost of managing content on these services.  In addition, Disney also saw average revenue per Disney+ user decline by 5 percent, in the US and Canada, as more folks look for better values among multiproduct offerings.

For this reason, Disney is opting to diversify their plan offerings, with Disney+ with commercials priced at $7.99 per money. This is the current price of the standard Disney+ without any ads, as it was when it was initially launched.  On December 8, though, Disney will increase the price of the ad-free options to $10.99. This $3 is equivalent to n increase of 38 percent.