The art of animation is a $372.44 billion business as of 2021 and is expected to grow at a compound annual rate of five point two percent through 2030. The top dog in this enterprise is none other than The Walt Disney Company. Their yearly revenue as of fiscal year 2021, which ran through September 30th, was $64.18 billion, a three percent increase over 2020.
Bottom Line
Companies worry excessively about their bottom line, no matter how big or small. They want to be well in the black after expenditures that they aren’t worried about an emergency, and for Disney, that’s not a problem unless their operating costs start to rise faster than their revenue.
However, password sharing is one thing that’s biting a big chunk out of that revenue. That’s right, the same issue that Netflix nipped in the bud earlier this year by nixing profit sharing among members of different households.
Disney is looking to tighten its profit loss by reducing users’ ability to share passwords among members of multiple households. NBC reports that Iger discussed the topic on Wednesday’s business call, saying, “We already have the technical capability to monitor much of this. I’m not going to give a specific number except to say that it is significant.”
Price Hikes
Looking to mitigate the loss of accounts through password sharing, Disney is also looking to raise prices again. The rate for ad-free viewing will go from $10.99 to $13.99. That’s the second rate hike in a year and will also affect Hulu, owned by Disney. Hulu’s top-tier service will rise to $17.99/month from $14.99.
However, Disney could be hurting its profits by raising fees for both Disney+ and Hulu simultaneously. Even rivaling Netflix is sketchy as Hulu doesn’t offer the breadth or depth of streaming options that Netflix controls. And at $19.99, there isn’t a big difference between the two streaming services where the price is concerned.
It’s too early to tell if Disney will see a loss of subscribers who move over to Netflix to garner more extensive viewing options.
Consumers Aren’t Happy
Seeing another price hike for Disney and Hulu isn’t making anyone happy. Considering this is the second rate hike in a year and Hulu’s prices are also rising, customers are looking to trim their streaming subscriptions. Several people have commented about looking to cut one or both services, especially since neither service offers much more content than what they already have going.
One user even posted a screenshot to confirm.
Disney plus price hike no ads going to $14
Byyyeee @DisneyPlus ( just canceled, screenshot attached)@StealthQE4 @RetirementRight @bourbonbuddy1 @SullyCNBC @Factschaser @FuturesOutlook @WSJmarkets @mistman78 @MadMoneyOnCNBC @SaraEisen pic.twitter.com/Wm22pwGiwz
— TySnake 🐍 (@Tyler929394) August 10, 2023
Another contributor had a more blunt opinion of the situation.
We all need to watch what we want to watch and cut bait on Disney and Hulu. Can’t pay their writers but they can significantly raise prices whenever they want. Its almost like companies aren’t being regulated anymore. The age of streaming is pretty much dead #DisneyPlus #Hulu pic.twitter.com/JjeYKUgnvn
— Joe (@JoeComicFan) August 10, 2023
Shareholders and The Stock Market
When Disney announced it would hike prices again, its price per share went up—from $89.74 to $90.60. This decision makes shareholders of Disney stock very happy. Just one more example of the rich getting richer off the backs of the 99%. And even though Disney will likely lose several thousand subscribers, they’ll still retain enough between all their company ownership that those few thousand won’t dent their long-term profits.
You Know It’s Bad
Even though Disney+ and Hulu’s services are getting more expensive, there is a silver lining. You can cancel each subscription whenever the price doesn’t justify the content. As the consumer, you have all the power if you’re unhappy. It’s a lovely caveat of being in that 99%; you can set the rules as the consumer.
Whether people are willing to sacrifice their wants on principle, though, is the big question. Even reminding people that CEOs are making bank off their meager paychecks won’t be the nail in Disney or Hulu’s proverbial coffins if people keep acquiescing to streamers for the same old content carousel.
Source: NBC, Forbes, The Hollywood Reporter, Twitter.
