Walt Disney Co. shares rose after the company reported better-than-expected subscriber growth for its streaming service in the third quarter and said it would raise the price of Disney+ by 38%, part of a plan to generate more revenue from the money-losing online business.
The Walt Disney Co. blew past estimates and added 14.4
million Disney+ streaming subscribers in the latest quarter.
As of July, the streamer had just over 152 million paid
subscribers.
In total, Disney streaming services, comprised of Disney+,
Hotstar, Hulu and ESPN+, now have more than 221 million subscribers worldwide.
The recent gains propelled the company past rival Netflix, which at the end of
the second quarter had just under 221 million subscribers.
"We had an excellent quarter, with our world-class
creative and business teams powering outstanding performance at our domestic
theme parks, big increases in live-sports viewership and significant subscriber
growth at our streaming services," Disney CEO Bob Chapek said in prepared
remarks.
Most of the new Disney+ subscribers came from outside the
U.S. and Canada. Of the 14.4 million new customers, only 100,000 came from
North America.
The company also announced price hikes at its streaming
services.
An ad-free subscription to Disney+ will cost $10.99 a month
or $109.99 a year in the U.S. beginning in December, up from its current cost
of $7.99 a month. A new Disney+ option with ads will cost $7.99 a month.
Disney-owned Hulu subscribers will also pay $1 to $2 more to
stream its content, depending on the plan.
Wall Street analyst Adam Crisafulli of Vital Knowledge said
Disney's price hikes align with the industrywide perception that streaming is
underpriced.
"Perhaps the most positive part of the release is the
news that Disney will hike the price of Disney+ by 38%, an action that would
seem to endorse the remarks from [Warner Bros Discovery's] Zaslav about how the
entire industry is underpricing streaming," he said in a statement.
The company also announced price hikes at its streaming
services.
An ad-free subscription to Disney+ will cost $10.99 a month
or $109.99 a year in the U.S. beginning in December, up from its current cost
of $7.99 a month. A new Disney+ option with ads will cost $7.99 a month.
Disney-owned Hulu subscribers will also pay $1 to $2 more to
stream its content, depending on the plan.
Wall Street analyst Adam Crisafulli of Vital Knowledge said
Disney's price hikes align with the industrywide perception that streaming is
underpriced.
"Perhaps the most positive part of the release is the
news that Disney will hike the price of Disney+ by 38%, an action that would
seem to endorse the remarks from [Warner Bros Discovery's] Zaslav about how the
entire industry is underpricing streaming," he said in a statement.
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