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Disney is planning another major price hike next year, and there’s not a darn thing you can do about it.
Over the last few weeks, everyone (except for those who’ve taken up residence on the underneath side of a rock) has heard news of The Walt Disney Company’s impressive* fourth quarter of 2021. The company’s quarterly earnings call was held, and all of Disney’s C-level execs were in attendance, as well as some of Wall Street’s finest.
Credit: Disney TV Animation
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(*Impressive for Disney and sickening for you and me.)
In theme park revenue alone, The Walt Disney Company reported $7.2 billion. (Remember, this is quarterly revenue, not annual revenue.) CEO Bob Chapek says that the company’s ability to generate wild amounts of revenue stems from the fact that Disney is a business based on demand.
“This is a supply and demand business, unfortunately,” Chapek told CNBC. “Unlike Disney+, we have a finite supply.”
Credit: Disney Parks
Many analysts point out that Disney is able to generate phenomenal amounts of revenue at the Disney Parks domestically and internationally despite the growing outrage on social media from parks fans who have had just about enough of Mr. Chapek, his ways of doing Dis-ness, and the company’s continual increases in daily ticket prices, annual passes, nightly rates at Disney Resort Hotels and more, some accusing Chapek and the company of intentionally weeding out the riff-raff in an attempt to make the Disney Parks experience one reserved for the elite alone.
It’s clear that the company knows what it’s got, who wants it, and what those who want it are willing to pay to get it.
That’s why Disney has never really had any qualms about raising prices anywhere in its Parks, and they certainly haven’t been shy about charging more for merchandise. Recently, some Disney Parks Guests have noticed that while the prices for food and drink are on the rise, portions seem to be dwindling, supposedly in response to the company’s increased costs for food and drink, as well as supply chain issues.
And again, the company makes no apologies for the increases. Hey, those C-level execs have got to eat too, ya know?
Credit: The Walt Disney Company/Canva Creation
And this week, as if to shine an even brighter spotlight on the brazenness with which the company continually raises prices for generally the same items, experiences, and meals, Chapek almost gloated about the company’s plans to host another major price hike in 2023 (though it could start sooner).
Disney has a method of charging Guests more at its theme parks but making new offerings in the parks, such as a new ride, a new parade, a new attraction, or a new experience, in an effort to make it feel worth the extra pain in Guests’ pocketbooks.
Now, the same looks to be the plan for another division within The Walt Disney Company: Disney+.
Despite Disney’s announcement that it will begin to offer an ad-supported version of Disney+ that will cost individual subscribers a little less on their monthly fees (if they choose to have their Disney-owned favorites chopped up by commercials), the fact remains that the original product is up for another price increase.
“The remainder of this fiscal year will feature compelling Disney+ originals from across our brands and franchises, beginning with PIXAR’s Turning Red and Marvel Studios’ Moon Knight in March,” Chapek explained during the earnings call.
Credit: PIXAR Animation Studios
This year, Disney projections show the company will spend an astronomical amount on its streaming content–around $33 billion to be more precise. However, some of the productions for which that money pays won’t go live on the platform until 2023 and possibly later. But that new content doesn’t come cheap to Disney, meaning it will not come to subscribers at the current monthly subscription rate.
“By 2023, we want to get to a steady-state, which is even higher than we have right now,” Chapek said. “And I think that will give us the impetus to increase that price/value relationship even higher and then have the flexibility if we were to so choose to then look at price increases on our service.”
Though he wasn’t clear about whether he was referring to the fiscal or calendar year 2023, Chapek was unmistakably clear that a price increase is coming for Disney fans who want to keep 24-hour-a-day access to their favorite Disney, PIXAR, Marvel, Star Wars, and National Geographic streamable offerings. It won’t be the first increase in price for Disney+ subscriptions. The platform went live on November 12, 2019, and in December 2020, Disney announced that a price increase was coming. Then the company increased the monthly subscription cost in March 2021.
“We maintain that we offer an extraordinary price/value relationship around the world for Disney+,” Chapek explained. “Plus, in all fairness, our own recognition that we needed to essentially double our production output. You put those two things together, and we certainly have less content than we want. But as we’ve said over the last few earnings calls, that will rectify itself in the second half of this year.”
It makes us wonder just how much we think we’re willing to pay for Mickey’s streaming service; $8 a month is one thing, but what if the monthly price goes to $20, $25, $30? That might be an entirely different conversation altogether.
