“We Do Feel Like We’ve Earned That Pricing” — CFO Comments on Disney+ Price Increases

The Walt Disney Company shared its financial results for Quarter 3 of the fiscal year 2024 on August 7th.

During the call, Disney commented on all parts of the company including theme parks, entertainment, sports, consumer products, Disney Cruise Line, and streaming. Prior to the earnings call with Disney CEO Bob Iger and CFO Hugh Johnston, Johnston had an interview with CNBC during which he commented on the new Disney+ price increases that will go into effect on October 17th.

CNBC had an interview with Disney Chief Financial Officer Hugh Johnston shortly before he and CEO Bob Iger gave the official earnings report for the Walt Disney Company.

During the interview, he was asked about streaming and the recently announced Disney+ price increases. He replied saying, “People tend to focus on price, but value is what the consumer perceives.” Disney believes that they are adding so much value to their streaming services that the price increases can follow.

With the announcement of price increases also came the news that Disney is adding continuous playlists starting on September 4th for all U.S. subscribers. This will include ABC News Live and a playlist for preschoolers. Later, four more playlists will be added.

During the earnings call, Johnston also stated, “We do feel like we’ve earned that pricing in the marketplace.” The hope is that by adding more content, value, and product improvements to their streaming services the subscribers should be less upset by spending more.

Disney has also recently added more bundle options to Disney+, now including a bundle for Disney+/Hulu/Max for $16.99 per month. There has also previously been mention of adding an ESPN tile to Disney+ similar to how Hulu is now.

In Disney’s earnings call commentary, they mention that they expect direct-to-consumer entertainment to be profitable in Quarter 4 due to increasing the pricing to “further align with the value [they] are providing to customers.” Currently, the combined streaming business with Disney+, Hulu, and ESPN+ turned a profit of $47 million. However, without ESPN+, the streaming unit reported a “modest loss of $19 million”, which Disney attributes to a growth in subscriptions and advertising revenue.

Overall, Disney believes that the price increases coming to Disney+ subscribers are warranted because of the value of the service, and that still to come.

We’re expecting some major announcements from Disney this week at the D23: The Ultimate Disney Fan Event in Anaheim, California, so keep following AllEars for more Disney news!

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