Troubles at The Walt Disney Co. continued in Q2-2023 with the company reporting that the Disney+ premium streaming service lost a whopping 11.7 million subscribers in the period.

At the same time, Disney said it will look to stem financial losses by raising prices again across its streaming service portfolio including the fee for Disney+ and related services and bundles. This is the second wave of price hikes for the company in a year, following last October’s increases.

Much of the streaming subscriber decline for Disney+ came from India, and followed a 4 million subscriber loss reported in the previous quarter. The company’s total streaming subscribers fell from 157.8 million worldwide to 146.1 million. The loss more than doubled last quarter’s record decline.

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Consequently, the company will look to raise revenue with another round of monthly fee increases. For U.S. subscribers that means the ad-free Disney+ Premium service will rise 27% from $10.99 to $13.99 per month, while the ad-free Hulu plan will rise from $14.99 per month to $17.99 per month. Hulu + Live TV with ads will rise $7 to $76.99 per month, and the ad-free option also goes up $7 to $89.99 per month. The fee for the ESPN+ premium sports streaming service is to climb $1 to $10.99 per month.

New pricing for bundles will be as follows: the Disney+ and Hulu bundle with ads remains $9.99 per month and a new Disney+ and Hulu ad-free bundle will be offered for $19.99 per month, a $12 per month savings. The triple-play Disney+, Hulu (ad-free), and ESPN+ (with ads) bundle is to cost $2 more per month at $14.99.

Further, the company said it plans to follow Netflix’s lead and crack down on password sharing with new preventive measures coming next year.

Disney said it is also to begin ad-supported Disney+ plans in Canada, the U.K., France, Germany, Switzerland, Italy, Spain, Norway, Sweden, and Denmark.

Meanwhile, the company said revenue was up 4% YoY to $22.3 billion.

Disney+ reduced losses in the period (down to $512 million from $1.06 billion a year earlier).

“Our results this quarter are reflective of what we’ve accomplished through the unprecedented transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business,” stated Robert A. Iger, The Walt Disney Company CEO. “In the eight months since my return, these important changes are creating a more cost-effective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of $5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly $1 billion in just three quarters. 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’s direct-to-Consumer (DTC) revenues for the quarter increased 9% to $5.5 billion and the operating loss decreased to $0.5 billion. The decrease in operating loss was attributed to a lower losses at Disney+ and ESPN+ and higher operating income at Hulu.

The company attributed the improvement at Disney+ to higher subscription revenue and a decrease in marketing costs, partially offset by higher programming and production costs and lower advertising revenue.

Hulu’s higher operating income was also attributed to subscription revenue growth and lower marketing costs, partially offset by higher programming and production costs and lower advertising revenue. Subscription revenue growth was due to increases in retail pricing and subscribers.

Improved results at ESPN+ were attributable to growth in subscription revenue due to increases in retail pricing and subscribers.

Meanwhile, the company’s revenue from linear networks dropped 7% to $6.7 billion as operating income declined 23% to $1.9 billion.

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By Greg Tarr

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