Disney has recently announced a significant price cut for its popular streaming service, Disney+, in the midst of a carrier fee dispute with Charter Communications. The monthly subscription fee for Disney+ has been reduced to $1.99 for three months, down from the usual price of $7.99 per month. This special offer is available to new and returning subscribers only.
In its efforts to make its streaming platforms profitable, Disney has undergone several changes, including the replacement of CEO Bob Chapek with former Chief Executive Bob Iger. Despite these efforts, the direct-to-consumer division of Disney, which includes Disney+, ESPN+, and Hulu, reported a $512 million loss in the most recent quarter. However, under Iger’s leadership, this figure is beginning to decrease. As of July 1, Disney had a total of 146 million Disney+ subscribers worldwide, with 46 million residing in the U.S. and Canada.
The dispute between Disney and Charter Communications revolves around carrier fees. Charter accuses Disney of demanding an excessive increase in these fees and blocking Disney channels such as ESPN, especially during major events like the U.S. Open. Charter has provided a detailed breakdown of the dispute on its website. In response, Disney has urged Spectrum viewers to switch to its Hulu + Live TV streaming service. Disney is asking Charter for an additional $1.50 per month per Spectrum subscriber, but analysts believe that the real issue lies in Spectrum customers not having access to Disney’s best movies and shows despite a higher subscription fee.
Disney stands ready to resolve the dispute in the best interest of Charter’s customers. However, Charter claims that Disney is trying to force customers to pay for expensive programming they may not want or can’t afford. The situation highlights the ongoing challenges of making streaming services profitable, as Disney’s direct-to-consumer division has yet to achieve profitability.
Author
Khristopher J. Brooks is a reporter for CBS MoneyWatch who covers business, consumer, and financial stories ranging from economic inequality to the business of sports.
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