The Disney and Charter clash continues, and as a result, Disney+ has cut the price of its basic subscription service to $1.99 from $7.99 per month in an effort to lure back more than 11 million subscribers who left the platform in the last quarter.
The company is getting desperate.
The move came after ESPN, ABC, and other Disney-owned channels were blacked out on Charter’s services since the beginning of September. The two companies remain in the midst of an ongoing struggle over a distribution deal, and no deal is in place yet.
Disney made its cut hoping that Charter’s Spectrum cable service customers will consider switching to a live television option from Hulu, in which Disney owns a majority stake in. On their website, Disney said of their decision: “Despite the ongoing dispute, consumers have many other choices such as Hulu + Live TV that allow them to enjoy the great programming for which Disney Entertainment is known.”
In their most recent, quarter, Disney’s streaming operation took a hit of $512 million. Since its launch in 2019, Disney+ has lost over $11 billion.
The total decline of 11.7 million subscribers around the world, excluding India, were attributed to one major factor: the low-priced version of Disney+ in India following the failure to renew the expensive rights to Indian Premier League cricket matches.
Bob Iger, Disney CEO, has been primarily focused on the company’s streaming operations as the cord cutting from cable surge continues. While he said in an earnings report a “challenging environment” exists and shortfalls in growth are probable, it’s difficult to say whether or not subscribers will come back now that Disney+ is making this price cut.
Disney was also dragged down by the broader market on Thursday as investors anticipated U.S. Federal Reserve Chair Jerome Powell’s speech and began to adopt a more cautious sentiment. The company’s stock fell to its lowest level in nearly nine years.
In the meantime, it appears there is a debate about the profitability of Disney’s streaming division, made up of Disney+, Espn+ and Hulu. The streaming service will also be rolling out a number of big movies such as Pixar’s ‘Elemental’ and the live-action adaptation of ‘The Little Mermaid’.
It remains to be seen how effective Disney+’s price cut is, and how things are going probably won’t help. When Disney decided to turn on their customer base, those loyal fans chose to move on.
The company thought they were too big to fail.
Now they are reduced to Bud Light style giveaways to win back customers.
Though their fall hasn’t been as dramatic as Bud Light’s, the company has taken a huge tumble.