Can Today's Price Hike Save Disney+?
It became a lot more expensive to enjoy Walt Disney's (NYSE: DIS) flagship streaming service on Thursday morning in its original ad-free form. Disney+ now costs $10.99 a month for access without commercial interruptions, a $3 or 38% increase. It's a bold move at a time when subscriber-hungry rivals are holding the line on price hikes.
In an ideal world, everyone pays $3 a month and Disney+ is no longer a money pit. There are 164.2 million subscribers worldwide on the platform. Disney investors were shocked to see a $1.5 billion operating loss for the media giant's streaming video segment in its latest quarter. Work the math. If 164.2 million accounts are paying $3 a month more -- or $9 a quarter -- that's nearly $1.5 billion in incremental revenue right there.
Naturally, plugging a hole in a leaky bucket isn't that easy. Many subscribers will walk away from Disney+. If you go by the Hulu example, most users will trade down to the new ad-supported plan at the old $7.99 a month price. More importantly, the price hike isn't being rolled out worldwide. A lot of places in the world -- including Disney's largest market in terms of subscriber numbers -- pay a lot less for the service.
Source Fool.com
