Amidst the ever-evolving landscape of entertainment, Walt Disney Co. is embarking on a new journey by levying charges on users who engage in the sharing of passwords on its premier streaming service.
Disney has announced that moving forward, subscribers of its Disney+ platform will incur an additional cost of $6.99 per month to include an “extra member” on its ad-supported tier, and $9.99 monthly to add an individual to its ad-free plan.
This fee amendment allows users the privilege to extend their subscription to a friend or family member beyond their immediate household, a feature exclusive to the flagship Disney+ service, excluding other platforms like Hulu and ESPN+ that cater to different content niches.
The Quest for Profitability in Streaming
In an era where streaming has become a pivotal revenue stream for media conglomerates, Disney’s endeavor to enhance the profitability of its streaming services comes to the forefront. The streaming segment encompassing Disney+, Hulu, and ESPN+ achieved profitability for the first time in the company’s Fiscal Q3 of this year, marking a notable milestone in August.
The amalgamated streaming platforms raked in $47 million in profits during Fiscal Q3, a stellar improvement from a loss of $512 million in the corresponding period a year earlier. Disney’s management is diligently striving for profitability in streaming, given the decline in the traditional TV business, including the ABC network, which is witnessing customer attrition and diminishing advertising revenues.
The urgency to render streaming profitable was further accentuated at Disney following a costly strike by Hollywood actors and writers last year. Disney+ witnessed a 1% growth in subscriptions, totaling 118.3 million in Fiscal Q3, outlining the company’s pursuit of financial sustainability. This strategic move mirrors similar actions undertaken by competitors such as Netflix, who are also clamping down on password sharing and implementing additional charges for shared accounts.
Analyze and Invest: Is DIS Stock Worth a Buy?
Assessing the investment climate surrounding Walt Disney’s stock, 22 Wall Street analysts advocate a Strong Buy rating. This consensus emanates from 18 Buy recommendations and four Hold positions issued within the last three months. As of now, there are no Sell ratings on the stock.
The average price target for DIS stock stands at $117.65, suggesting a potential upside of 22.46% from current trading levels, indicating a promising outlook for investors keen on capitalizing on Disney’s evolving streaming strategy.
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