Disney raises price for Disney+, as revenue shrinks nearly everywhere but parks
Aug 9, 2023, 3:32 PM
Chairman and Chief Executive Officer of The Walt Disney Company Robert Iger attends the Television Academy's 25th Hall Of Fame Induction Ceremony at Saban Media Center on January 28, 2020 in North Hollywood, California. Mandatory Credit: Rodin Eckenroth/FilmMagic/Getty Images/FILE
(CNN) — The Walt Disney Company is hiking prices for its Disney+ streaming service for the second time in less than a year, as its third-quarter earnings report showed revenue struggles almost everywhere but international parks.
The streaming service’s ad-free subscription will cost $13.99 beginning October 12, an increase of $3 per month. In December, the company had raised the price of its ad-free tier from $7.99 to $10.99.
“We’ve raised prices in nearly 50 countries around the world to better reflect the value of our product offerings, and the impact on churn and retention has outperformed our expectations,” Iger said about the company’s streaming service on DIsney’s fiscal third quarter earnings call.
Disney+ remains unprofitable for the company, though it has narrowed its revenue loss in the third quarter.
While Disney+ added international subscribers in the quarter, it lost subscribers in the US and Canada.
Overall, Disney reported slightly lower than expected revenue for its fiscal third quarter on Wednesday.
The company reported revenue of $22.3 billion compared to expectations of $22.5 billion, according to estimates from Refinitiv. Revenue in linear television declined 7% compared to the same quarter last year.
“While there is still more to do, I’m incredibly confident in Disney’s long-term trajectory because of the work we’ve done, the team we now have in place, and because of Disney’s core foundation of creative excellence and popular brands and franchises,” Disney CEO Bob Iger said in a statement.
Disney (DIS) shares initially fell in after-hours trading but reversed course to gain more than 3%.
Disney’s parks were a bright spot, even as the company struggles with declining attendance at its flagship Disney World Resort in central Florida.
Disney parks, experiences and products revenues for the quarter increased 13% to $8.3 billion, which the company said reflected growth in its international parks, like Shanghai Disney Resort and Hong Kong Disneyland Resort.
“The increase at Shanghai Disney Resort was due to the park being open for all of the current quarter compared to 3 days in the prior-year quarter as a result of Covid-19 related closures,” the company said in a statement.
However, the company acknowledged that the division’s growth was partially offset by lower revenue at its US-based domestic parks.
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