Walt Disney Co. is raising the price of its flagship Disney+ streaming service by 38%, part of a plan to generate more revenue for its money-losing online businesses and build on third-quarter results that beat estimates for sales, profit and subscriber growth.
On Dec. 8, Disney will introduce an ad-supported version of the flagship streaming service and raise the price of the ad-free option to $11 a month, the entertainment giant said Wednesday.The price increases, subscriber gains and a strong third-quarter performance from Disney’s namesake theme parks may help reverse investor sentiment that sent the shares down 27% this year through Wednesday’s close.
The world’s largest entertainment company, Disney is trying to stem losses in its direct-to-consumer business as it navigates a transition from traditional TV viewing to online options. Current Disney+ subscribers will begin receiving the ad-supported version unless they agree to pay more for the commercial-free plan.
Operating losses at the direct-to-consumer business, which includes the streaming services, more than tripled to $1.06 billion as the company continues to invest in new programming and expand to new territories. That was worse than the $697 million analysts expected. Disney expects to spend about $30 billion on programming in the current fiscal year, down about $3 billion from its original plans.
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