The most recent Walt Disney Co. (NYSE: DIS) quarterly report caused the company to be hit by a wall of bad press. The same was true at many media outlets about perennial CEO Bob Iger. To be fair, no one can fix Disney in its current form. There was broad speculation that Disney would sell off major assets or break itself into more than one corporation.
[in-text-ad]
Iger said Disney’s streaming businesses would transform the company when Disney+ was launched in late 2019. He was right, except the transformation has nearly crippled it. The New York Times pointed out that Disney has lost $11 billion in the streaming business since its inception. In the most recently reported quarter, the division lost $512 million.
Disney’s total revenue for the quarter was $22.3 billion, up 4%. The company’s loss from continuing operations was a $406 million loss, compared to a profit of $1.4 billion the year before. Disney’s theme parks carried the company on its back. Revenue for the segment rose 13% to $8.3 billion. Its operating income rose 11% to $2.4 billion.
Disney+ lost 11 million subscribers during the quarter to 141.6 million. Much of the loss was due to its troubled business in India. Nevertheless, it is still well behind rival Netflix, which has a subscriber total of 238 million. Amazon’s streaming business has nearly as many as Netflix’s.
Iger’s answer to Disney’s streaming problems is to raise prices. The ad-free version of Disney+ will have its monthly subscription price move up to $13.99. That is from $10.99. And that is up from $7.99 less than a year ago.
Iger’s decision about subscriber price is a long shot. The average American household has 2.8 streaming services, according to Forbes. At some point, a household streaming budget will be enough of a burden that people will be more selective. Raising prices drives churn. As a service loses subscribers, it has to replace them. Will people pay for a Disney+ as its prices balloon? The company is about to find out and may not get the answer it wants.
Iger has run out of cards to play. Sharp price increases for streaming services are not going to solve that problem.
Credit Card Companies Are Doing Something Nuts
Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.
It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.
We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.