Raising prices is paying off for streaming platforms like Disney+

Disney had a good day on Wall Street after the company reported stronger-than-expected quarterly earnings on Wednesday, the first with new CEO Josh D’Amaro at the helm.

Streaming was a particular bright spot — it’s now a bigger business than linear TV for the company’s entertainment division. Disney+ and Hulu boosted revenues by almost 90% over the last year. All the big platforms have been raising prices in recent years, including Netflix, which recently announced its second price hike in just over a year. This is an era of streaming profitability, whether consumers are grumpy about it or not.

Back in 2023, New Orleans sports fanatic Jonathan Barnes said he subscribed to streaming services with abandon — usually seven or eight at a time. But now, he said times have changed.

“You start having to look at your bank account and saying, ‘okay, well, how much am I actually watching all… of these subscription services? Which ones do I truly, truly need?’” he said.

For Barnes, who has a young child, subscribing to Disney+ is non-negotiable. He’s a big WWE fan, subscribes to YouTube TV to cover sports and added on Hulu with his Disney bundle.

“We’re not thrilled because, again, the subscription services continue to go up, but we felt that consolidating them was much more effective,” he said.

Ross Benes, a senior analyst at eMarketer, said the subsidized streaming party is long over.

“Streaming wasn't going to be something for the users,” Benes said. “It's there to make money for the mass media companies.”

But he said consumers seem to be getting used to it.

“You're seeing something similar that you saw with cable for years, where people would complain their bill was going up but they would still pay for it,” Benes said.

In fact, households surveyed by the market research firm Parks Associates actually increased the number of services they subscribe to over the last quarter to an average of six, said Michael Goodman, the firm’s director of entertainment research. The amount households spent also increased in that period, from $108 to $113 per month.

“I think bundling has a lot to do with this, because they're able to get more bang for their buck here,” Goodman said. “They're able to get multiple services without having to pay for each one individually.”

Jon Giegengack, principal at Hub Entertainment Research, said consumers are also looking for value by often choosing lower-priced plans with ads.

“We didn't used to see people switch back and forth between tiers all that often,” he said. “But it's definitely something that's happening more often, and I think it’s something that will continue to go on as the prices continue to rise.”

Consumers also report feeling less bothered by ads than they were in the past, he said. Or, maybe, they’re just resigned to them.