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When The Walt Disney Company launched its streaming service, Disney+, in 2019, they knew it would be a while before the platform earned a profit. Disney CEO Bob Chapek and CFO Christine McCarthy have been very open about the fact that they don’t expect Disney+ to be profitable until 2024 — a time frame they are still on target to meet. However, that 2024 date, while fast approaching, may not be fast enough for investors who have a lot on the line with Disney+.
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Chapek was invited to speak at the Paley Center in New York and the topic of Disney+ was broached. The Walt Disney Co. CEO then admitted that investors were looking for a way to get a return on their Disney+ investment. The Hollywood Reporter was at the event and reported on Chapek’s remarks.
“There is an increasing desire by our investor base to make sure there is something there, there, to get something out of it,” Chapek said, adding that while the company is investing long-term in Disney+ to make it “the hub” of the Disney lifestyle, in “the shorter term, our investors expect us to have a return on that investment.”
He also reiterated what he told analysts Tuesday afternoon, noting that price increases and the upcoming Disney+ ad tier will help bring the company closer toward its goal, and that the service should be able to continue adding subscribers thanks to its content pipeline and new international launches.
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For those who may not know or have forgotten, on December 8, Disney will launch its new ad-supported tier. Disney+ with ads will launch at a cost of &.99 per month or $79.99 for the year. Disney+ without ads will see its cost for subscribers increase from $7.99 per month to $10.00 per month. The price increase will also affect Hulu — which is owned by Disney. Hulu Live with Disney+ and ESPN+ will go from $62 per month to $74.99 per month.
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During COVID, Disney released a number of blockbuster films on Disney+, including Black Widow and Mulan. Recently, Hocus Pocus 2 was released on Disney+ and was one of the platform’s biggest hits. Chapek has said that there is nothing set in stone when it comes to continuing to release big titles, or they will go back to the traditional theatrical release.
News of investors wanting to see returns comes on the heels of Disney+ adding 12 million subscribers, but its revenue-per-share falling below Wall Street projections.
