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Walt Disney Company CEO Bob Chapek answered a question from Goldman Sach’s Brett Feldman about Disney+ costs during the Walt Disney Company’s call about its second-quarter financial results, and implied that Disney+ pricing will most likely expand in the future.
“How do you think about the right cadence for revisiting pricing on Disney+ really when you can take [the] price higher?” Brett Feldman asked Disney CEO Chapek. “It just seems like there’s a lot of factors that would go into that, including the fact that you’ll be launching a new ad-supported tier. You’re putting a lot more content onto the service. You’ve seen some increased competition, and obviously, there are some inflationary pressures”.
Disney CEO Bob Chapek Credit: Disney
“As you know, we launched with an extremely attractive opening price point on Disney+, and we’ve been very comfortable with the price value relationship that we’ve offered,” Chapek responded. “And as you know, as we increase our content investment, we believe that that’s going to give us the ability to adjust our price base and still, at the same time maintain that strong value proposition”.
“You [Feldman] mentioned the Disney plus ads tier,” Disney’s CEO continued. “I think this is going to give us the ability to reach an even more broad audience as we expand Disney+, across multiple price points.”
Disney CEO Bob Chapek Credit: Disney
“And using some of our other services we can see the additive nature of an ad-driven service that enables us to keep the price lower. Of course, that’s made up for by the additional revenue that we will get per user on the advertising spending,” Chapek explained. “So we believe that we can, you know, sort of move up and cascade up our net price over time given the tremendous value that we started with, and the increased price-value relationship, all of all the new content, but we’re pretty bullish about that.”
“Bullish” is a term used in the stock market that refers to something’s increase in value, while a “bear” market would be a dwindling market for something that was decreasing in value, so Chapek’s use of “bullish” does imply that he’s anticipating Disney+ price increases for users.
Disney CEO Bob Chapek and former Disney CEO and Executive Chairman Bob Iger. Credit: Collider.com
Chapek and Disney clearly have big plans for the streaming service Disney+; Chapek shared that “by the end of Q3 [Quarter 3] we plan to roll out Disney+ to 53 new markets across Europe, Africa, and West Asia starting with South Africa next week”.
Chapek also declared that “expanding Disney+ access through multiple price points is a win for consumers and advertisers. Of course, all of our success is [also] rooted in great content,” the Disney CEO also added.
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