Disney’s streaming platform Disney+ is threatening to raise prices due to government involvement, according to a BBC report. It’s a move that has most subscribers saying “no thank you,” but it could happen thanks to new regulations and a government-created loophole to gain access to free content. If this happens, Disney is prepared to fight back with higher prices for those who choose to pay.
Subscription services have come under fire lately for their tendency to make cancellations difficult. There are also concerns about the lack of notification given before the services charge subscribers’ accounts for renewal. The United Kingdom is fighting back against the practice that they deem as predatory. To combat this, the U.K. has enacted a series of laws to ensure consumers get “a fair deal.”
One of these regulations involves a 14-day cooling-off period where subscribers can receive a full refund for any reason within the first two weeks of subscribing. Disney claims this will simply open the door for users to subscribe, binge-watch the content they want to see, and then get their money back. Disney warns this would have a detrimental impact on paying subscribers.
In a submission to the Lords Communications and Digital Committee, Disney said. “This would allow these bad actors to benefit from our service without compensation to the detriment of the vast majority of good actors, as it could likely result in a price increase given the reduction in the subscriber base and the high cost of producing high-quality content.”
Disney+ is already struggling to turn a profit. Any loss, real or perceived, will result in price hikes to save the struggling platform. This cost increase would likely be seen internationally, affecting users in both the United States and Europe as Disney attempted to recuperate loss. Disney+ reported a 2.4 million subscribers loss in the second quarter, so subscriber retention is going to be high on its priority list. Governmental incursions that threaten subscriber retention aren’t going to be met well by the company.