Is Disney About to Repeat Netflix's Mistake?
Remy from Ratatouille isn't the only rodent that's cooking these days at Walt Disney (NYSE: DIS). Shares of Disney moved higher on Wednesday afternoon after the House of Mouse delivered encouraging financial results and announced new pricing for its Disney+ streaming service.
The premium platform currently costs U.S. users $7.99 a month in its commercial-free form. The media giant will follow many of its peers and introduce an ad-supported tier on Dec. 8. However, unlike other services that roll out a cheaper price point for an ad-backed offering, Disney is making that the new $7.99 a month plan. The monthly price for the current ad-free version of Disney+ will go to $10.99, a hefty 38% increase in this iffy economic climate.
After seeing Netflix (NASDAQ: NFLX) prove mortal with back-to-back quarters of sequential member declines following its most recent increase, Disney could be making a mistake. This is not an ideal time to test a platform's pricing elasticity, but what if Disney knows what it's doing? The Mickey Mouse company better hope that it has a better mousetrap.
Source Fool.com
