Disney’s CEO vows to make its streaming service profitable

The CEO of Walt Disney promised that its streaming services, Disney+ and Hulu, would raise their prices to become profitable.

CEO of Walt Disney Co. Bob Iger promised to increase prices for its ad-free Disney+ and Hulu plans in October and crack down on password sharing through the end of the following year in order to make the company's streaming services profitable.

The price increases will bring the ad-free Disney+ monthly fee up by $3, or roughly 27%, to almost $14. In addition, the price of ad-free Hulu will increase by $3 to nearly $18—a 20% increase that will make it cost more than Netflix's most popular ad-free tier.

Iger spoke after Disney's fiscal third quarter, which ended on July 1, released its mixed earnings. The business reported a sizable net loss while losing clients in both the domestic and foreign markets. Disney reported an overall 4% increase in revenue for the quarter but switched from a $1.4 billion profit a year earlier to a net loss of $460 million. In after-hours trading, Disney shares, which had closed at $87.49, increased by about 2.2% to $89.45.

Disney+ experienced narrower losses during the quarter, but it continued to lose domestic subscribers in the United States and Canada. Internationally, it recorded its third consecutive quarter of declines, despite the fact that problems in the Indian market were a significant factor.

The service reported 157.8 million international users in the second quarter, a 7.4% decrease from 146.1 million in the third quarter. That came after a second-quarter loss of 4 million streaming subscribers. It lost the same number of domestic subscribers—300,000—in the third quarter as it did in the second.