Disney has recently dropped the price of its streaming service, Disney+, to just $1.99 as it continues to face issues with cable provider Charter Communications. This promotion will run until September 20th and will charge the reduced rate for only three months before returning to the original price of $7.99 per month. This move is unprecedented for Disney, according to Rich Greenfield, co-founder of Lightshed Partners.
Disney has been losing subscribers due to its ongoing dispute with Charter. The blackout has affected nearly 15 million households that can no longer access popular channels like ESPN. It is possible that the price drop is a response to the accelerated decline in subscriber growth, with Disney+ losing 11.7 million subscribers in the most recent quarter.
The timing of the price drop coincides with the release of new movies on Disney+, such as Pixar’s “Elemental” and a live-action adaptation of “The Little Mermaid.” Disney is hoping to attract new customers to its service, which already has 146.1 million subscribers.
Since Bob Iger returned as CEO in 2022, Disney has been focused on increasing the profitability of its streaming division, which includes Disney+, ESPN+, and Hulu. This comes as more consumers are cutting the cord and moving away from traditional cable.
Last week, Charter blocked Disney’s cable channels from its Spectrum network in major markets like New York and Los Angeles after the two companies failed to reach a distribution agreement. Disney has urged angry customers to subscribe to its own Hulu + Live TV or other streaming services instead.
Despite the ongoing dispute, Disney pointed out that consumers have many other choices, such as Hulu + Live TV. They emphasized the convenience of subscribing without a contract, cable box, or wait time.
The impasse between Disney and Charter comes at a busy time in the sports calendar, with the start of the college football season, the US Open tennis tournament, and the upcoming National Football League season.
Charter has said that it was paying around $2.2 billion annually to Disney for programming costs, excluding advertising revenue. The cable company has promised to continue negotiating in good faith.
Disney, which has seen its stock hit nine-year lows due to the disruption in its traditional TV business, has not revealed the exact amount it is seeking from Charter. Disney stated that its rates and terms are driven by the market and that it has successful agreements with pay-TV providers across the country.
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