The Walt Disney Co. (DIS) posted a rare net loss for this year’s second quarter and announced plans to both raise prices for its streaming service and crackdown on password sharing.
Disney announced a net loss of $460 million U.S., or $0.25 per share, for the quarter ended July 1, down from net income of $1.41 billion U.S., or $0.77 U.S. a share, a year earlier.
Revenue in the quarter rose 4% to $22.33 billion U.S., which was just shy of Wall Street forecasts of $22.5 billion U.S.
The unusual net loss was attributed to a one-time $2.65 billion U.S. impairment charge related to Disney pulling content off its streaming platforms and ending third-party licensing deals.
Excluding the impairment charge, the Mouse House earned $1.03 per share for Q2.
However, Disney also announced a greater-than-expected number of subscriber losses at its Disney+ streaming service during the quarter.
The company reported having 146.1 million Disney+ subscribers as of July 1, a 7.4% decline from the previous quarter and a bigger decline than analysts had expected.
The majority of subscriber losses came from India’s Disney+ Hotstar, where the company saw a 24% drop in users after it lost out on rights to Indian Premier League cricket matches.
A bright spot for Disney was its theme parks, which saw a 13% increase in revenue to $8.3 billion U.S. during the quarter.
In an earnings call with analysts and media, Disney executives announced plans to raise prices on almost all of its streaming offerings as it looks to achieve profitability for that business.
Commercial-free Disney+ will cost $13.99 U.S. per month starting this October, a 27% increase. The lower tier Disney+ with ads will see its monthly cost remain at $7.99 U.S.
Disney is also planning to expand its ad-tier streaming offering to new markets starting on November 1 of this year, including Canada.
Rival streaming service Netflix’s (NFLX) standard plan without commercials costs $15.49 U.S. a month. Disney executives also said they plan to take a page from Netflix’s playbook and crackdown on the practice of password sharing.
Management said they are exploring methods to stop account sharing on Disney+ and expect to begin the crackdown in 2024.
Analysts and investors seemed to like news of the price increases and password sharing crackdown, sending Disney’s stock up as much as 4% in after hours trading.
In the last 12 months, Disney’s stock has declined 22% to $87.49 U.S. a share.
Tech Insider
