Walt Disney Co. added more streaming subscribers than expected in the second quarter. Disney plans to launch an ad-supported tier while increasing prices on its current offerings. Disney Chief Financial Officer Christine McCarthy scaled back the company’s forecast for Disney+, predicting it expects to sign between 135 million and 165 million subscribers.

Shares of Disney moved about 7% higher in after-hours trading as investors cheered strong, across-the-board results for Disney’s streaming, TV networks, and theme parks businesses. A few months ago, Disney Chief Executive Bob Chapek estimated Disney's oft-stated target of 230 million to 260 million total Disney+ subscribers was “very achievable.”

Hulu’s ad-supported tier will cost $7.99 a month as of Oct. 10, with a premium subscription moving to $14.99. Previously announced changes to ESPN+ pricing will go into effect on Aug. 23. Disney will also continue to offer several bundles of its different streaming services. A bundle of Disney+ and Hulu with ads will be $9.99, for example, while adding ESPN+ with ads to that package moves it to $12.99 per month.

A premium version of the bundle, which includes Disney+ and Hulu without ads and ESPN+ with ads, will cost $19.99 a month. Disney posted fiscal third-quarter net income of $1.41 billion, or 77 cents a share, on sales of $21.5 billion, up from $17.02 billion a year ago.

After adjusting for restructuring costs, amortization and other effects, the company reported earnings of $1.09 a share. That's compared with adjusted earnings of 80 cents a share a year ago. The company's quarterly results are expected to be released later this month.
Posted by BI bizpoke
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