New VIP+ Analysis: As of the latest quarter, $DIS streaming service Disney+ has lost more than $8 billion as it nears its three-year anniversary
a jaw-dropping 12 million subscribers last quarter, you’d think Disney stock would be soaring on the results. Maybe if it was 2020 or even 2021, but not in 2022. Shares sank as much as 10% in the after-hours trading session Tuesday.
None of this was good, but at least management is aware. CEO Bob Chapek acknowledged that Disney had been aggressive over the past three years with its content spend in order to gain a lead in the streaming wars. “We knew record growth would result in short-term losses,” he said on the conference call.
Disney expects both efforts to prop up sagging ARPU, and the price increases are also projected to help with profitability. While some may argue that Disney has the pricing power to charge extra bucks for its streaming products, theThe best-case scenario is that the consumers who don’t want to pay the higher fee choose to opt for the new ad-supported product instead of leaving the service outright.
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