Is Disney+ About to Hike Prices Again?

Despite increasing prices towards the end of last year, Walt Disney's streaming service is still experiencing losses, according to CEO Bob Iger. During a recent investor conference, Iger hinted at the possibility of another price increase, indicating that the current pricing strategy for Disney+ was still not satisfactory. Facing challenges in the form of subscriber churn, Disney+ offers multiple promotional mechanisms, including annual subscription options with a 16% discount and bundled streaming services that drive higher long-term subscriber value, with lower churn rates, according to CFO Christine McCarthy during Disney's Q4 earnings call. However, the majority of subscribers still pay monthly, making it difficult to counteract churn. In light of this challenge, Disney may choose to increase its monthly subscription fees faster than annual or bundled offerings. Iger's comments suggest that investors could expect to see another modest price increase that balances subscriber growth and profitability over the next couple of years. This follows news that Disney+ has fallen just short of Statista's global subscriber estimates, with 161.8 million subscribers in Q1 of 2023, and could lead to further revisiting of the pricing strategy.

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