Disney - earnings discussion

DIS has made the decision to further up its streaming monetization efforts by adopting paid sharing starting in 2024, following NFLX's lead. These price increases come on top of those for Hulu and Disney+ Premium (ad-free) that will increase by 20% and 30%, respectively, starting in October 2023. While these initiatives may accelerate the company's top and bottom-line growth, it is still unclear whether they will be able to increase Disney+'s dwindling US streaming market share to 13% by Q2 of 23.

Long-term, the well-diversified entertainment options provided by DIS, including ESPN and sports betting, across resorts, theme parks, cruises, and streaming, might be a real franchise flywheel. Able to set itself apart from rivals and preserve an alluring value proposition for clients. Disney and Apple have a number of intriguing partnerships for the Vision Pro spatial headset, which will feature Disney+ streaming video and immersive 4D gaming experiences. Although the headset won't be available until early 2024, the media company will probably benefit from its strong IP portfolio and increasingly varied revenue prospects.

Netflix, unlike Disney, has not yet increased pricing, but it has also subtly discontinued the cheapest ad-free package, thereby increasing overall subscription and advertisement profits. Since more customers are likely to switch to ad-supported rates as a result of less discretionary spending, an elevated interest rate environment, and increased ad-free streaming plans, these moves are undoubtedly deliberate.

However, Disney investors should also be aware of Disney+'s diminishing streaming market share in the US, which will drop to 13% by Q2 23 (a 5% decrease from December 2022 and a 2% YoY increase). The increased prices could likely result in more churn and market share losses, increasing the stock's volatility during the ensuing two quarters.

https://www.cnbc.com/2023/08/09/disney-dis-earnings-report-q3-2023.html