Walt Disney’s (NYSE:DIS)
The market responded positively to Walt Disney’s (NYSE:DIS) decision earlier this month to increase rates for its premium streaming services, as price flexibility is seen favorably by investors. In December, Disney+ subscribers will have to pay an additional 38% to continue enjoying the service without commercial interruptions. Even though Disney has a controlling stake in Hulu, the streaming service’s monthly fees are increasing. Last month, ESPN+ revealed an increase of 43%.
With these new prices, Walt Disney (NYSE:DIS) is now competing with its rivals. Is it cognizant of the fact that many of its rivals are retreating? While Disney’s self-assurance is inspiring, it might backfire if the media giant doesn’t understand the living room as well as its competitors.
Swapping channels
Unlike Disney+, Comcast’s (CMCSA) Peacock TV hasn’t become an instant hit. Like other platforms outside of Disney and Netflix (NFLX ), Comcast is attempting to stand out to show off its feathers to a broader audience, and Peacock+ has had a couple of marginal hits with Dr. Death and Bel-Air. At the end of June, Peacock+ had 13 million paying subscribers, unchanged from three months earlier.
Comcast is taking drastic measures to secure additional subscribers in light of the company’s urgent need to grow its user base. Starting September 1st, you can get a year of Peacock+, which is essentially Peacock Premium with ads, for just $19.99. The discounted monthly rate is 60% off the usual annual cost of $49.99.
Not only does Peacock provide a less expensive alternative, but so do other platforms. An ad-supported version of Netflix now dominates the market and is developing. After two consecutive quarters of falling subscriber numbers, it is beginning to suspect its last price increase earlier this year may have been excessive. Paramount+ Essential, generally priced at $59, is now available to members of Walmart’s (WMT) premium member loyalty program at no extra cost. This was revealed last week. Warner Bros. Discovery (WBD) reported in its most recent earnings call that it had extended its contract to continue distributing HBO Max to people with high-tier AT&T cellphone plans at no cost, even though it severed ties with AT&T (T) earlier this year.
Consumers who want to watch their favorite shows and movies online for less money will be pleased to know that this summer has been full of offers and alliances that will make that possible. Is Disney+ seriously off-track?
The bold action makes it reasonable, given the situation’s current momentum. With 221.1 million customers as of June, Walt Disney’s (NYSE:DIS) three premium services have seen tremendous growth over the previous year. Similar shows are seeing audience numbers plateau at best and often decrease. Due to the impending shakeout, several minor players are getting desperate. They are prepared to forego revenues for the land grab, but is it enough?
As the effects of the price hikes on Walt Disney’s (NYSE:DIS) three “plus” services begin to show early next year, we’ll have a better idea of whether or not the company went too far. Even though it makes significantly less money per user than Netflix, it now has more users. Even though Disney+ only launched two years ago, the company has already become a significant player in the streaming media market. It’s risky to do so when consumers are forced to cut back on discretionary spending due to rising prices, but if Disney can succeed, there’s a lot to gain.
Featured Image : Megapixl © Blueice69caddy
Author Shariq Khan 