The Walt Disney Company continues to hemorrhage money on its streaming services, losing hundreds of millions of dollars in the most recent quarter as it plans to pass some of that pain to consumers by once again jacking up prices on Hulu, Disney+, and ESPN+.
Disney reported its streaming businesses lost $512 million for the fiscal third quarter, marking an improvement from the same period last year when it lost more than $1 billion. CEO Bob Iger is in the midst of reining in the company’s profligate spending habits in the face of plunging profitability, recently laying off an unprecedented 7000 workers worldwide.
For the past three fiscal quarters, Disney’s streaming losses have amounted to a stunning $2.22 billion.
Disney fans will help absorb the impact of these losses in the form of higher monthly bills as the company jacks up prices across the board on its streaming services.
The price of a monthly Disney+ subscription is rising to $13.99 from $10.99, while Hulu is going up to $17.99 from $14.99. ESPN+ is rising to $10.99 from $9.99.
The increases are set to take effect in October.
Iger said during Wednesday’s earnings call that the company will follow Netflix’s lead in cracking down on password sharing.
“We’re actively exploring ways to address account sharing and the best options for paying subscribers to share their accounts with friends and family,” Iger reportedly said, adding that “we will roll out tactics to drive monetization sometime in 2024.”
Legacy Hollywood studios are attempting to spend their way to streaming success in the face of plummeting TV ad revenue as more and more consumers cut the cord. In addition, President Joe Biden’s economic policies continue to hammer American households in the form of out-of-control inflation, putting a significant damper on consumer spending and, as a result, corporate ad spending.
Disney reported that its traditional TV business saw revenue drop 7 percent from last year. Overall, the company reported revenue of $22.3 billion for the quarter, falling short of Wall Street’s expectation of $22.5 billion.
Paramount recently announced that it lost $424 million for the most recent quarter on its streaming services.
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