August 6, 2019
With costs increasing exponentially as Disney prepares for the Nov. 12 launch of a branded subscription streaming video service (Disney+), CEO Bob Iger on the company’s Aug. 6 fiscal call disclosed an aggressive pricing strategy aimed at Netflix.
In addition to offering Disney+ for $6.99 monthly, the media giant will bundle the SVOD with ESPN+ and Hulu for $12.99 — about on par with the most popular Netflix subscription.
“Nothing is more important to us than getting this right,” Iger said on the call.
Indeed, with Disney not projecting a profit from Disney+ for five years, costs associated with the rollout and assimilation of 100% ownership of Hulu continue to escalate.
Disney’s Direct-to-Consumer & International segment increased Q3 operating loss to $553 million from an operating loss of $168 million during the previous-year period. Revenue increased from $827 million to $3.85 billion.
And Wall Street isn’t impressed as Disney shares are down almost 4% in aftermarket trading.