Episode summary
Disney+ Price to Jump 13% to $21.49 Per Month | Bloomberg Intelligence
Bloomberg Intelligence
· · 22 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Geetha Ranganathan, Brian Egger, Emily Cohn
Summary
Disney is pushing streaming further toward monetization, with Disney+ set to jump 13% to $21.49 per month and the ad-supported Disney+ and Hulu standalone tier at $12.49. The analyst argued that Disney is following the industry away from subscriber growth and toward profitability, and said Disney has been especially aggressive on pricing since launching Disney+ in 2019, with cumulative increases of about 170%. The discussion also framed Netflix as the benchmark, with the analyst saying Disney is still far from Netflix-like operating margins and that Netflix itself will need careful price hikes if it wants to reach 40% margins.
The conversation then shifted to Royal Caribbean’s agreement to buy a 50% stake in Sandals Resorts International for about $3 billion. The analyst said the deal fits a broader cruise-industry strategy of using land-based and island destinations to complement ship assets, while limiting leverage and preserving tax advantages. Higher fuel costs, including bunker fuel, remain a pressure point, but the analyst said leisure demand and cruise bookings have stayed strong overall, aside from some weakness tied to Middle East conflict.
General Mills rounded out the discussion, with the consumer analyst saying the company is trying to restore growth by leaning into products with more protein and fiber. The core argument was that inflation-stressed shoppers are trading down to private label, trading up to premium “better for you” products, and squeezing the middle. Retailers are also pushing back harder on pricing, making shelf space and promotions a tougher battleground.
Key takeaways
- The analyst said Disney has already raised Disney+ prices about 170% since 2019 and is prioritizing profitability over subscriber growth.
- Disney’s streaming business has moved from about a $4 billion loss two years ago to roughly $2.5 billion to $3 billion of profit, but still trails Netflix’s margin target.
- Royal Caribbean’s 50% Sandals purchase is meant to add land-based resort exposure without taking on full control or heavier leverage.
- The analyst said cruise bookings remain robust overall, even as higher bunker fuel prices pressure operating costs.
- General Mills is leaning into protein and fiber products because private label is gaining share and middle-tier branded foods are getting squeezed.
Notable quotes
“they're just keeping up here with the Joneses, Paul. So, you know, everybody in the streaming world has obviously been raising prices”
“It has become all about monetization. And again, you pointed to the advertising part of the business”
“today, we're looking at almost about 2 and 1/2 to $3 billion of profit”
“the number that everybody is chasing in the industry is the Netflix number, which is 30% operating margin”
“this is part of a continuing, maybe you call it a land-based strategy to augment their cruise assets with destination ports of call and land-based assets”
How the episode opens
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Are you a Disney Plus subscriber, either of you guys? — I was. I go back and forth. — Forth. I think that's a big jump, 13%.
I know. Double-digit percentage change in light to 2149, that's a different level of, you know, do I want to partake in this or not? I was just thinking while you were reading some of the latest headlines, if you type top worldwide go on the Bloomberg terminal, ev- not every, but many of the headlines are all, you know, reaffirming this inflation theme.
The big take today is about how $5,000 bike shows why it's hard to build in America. You talked about the Disney Plus price hike, US mortgage rates climbing above 7%, Treasuries swooning because this PMI data's reviving inflation flows woes. You can't get away from it.
No, inflation is everywhere seemingly and including at the streaming business. So, let's check out this Disney news here. We can do that with Geetha Ranganathan, she covers all the media stocks for Bloomberg Intelligence. Geetha, I don't know, 13% seems like a a big jump here. What's behind it for Disney raising the prices here on Disney Plus?
Yeah, they're just keeping up here with the Joneses, Paul. So, you know, everybody in the streaming world has obviously been raising prices and really the narrative for all of the streamers and all of the media companies has shifted away from, you know, chasing subscriber growth to chasing profitability. And the one way that you chase profitability is implement these price increases from time to time.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- streaming price hikes
- disney+ pricing
- cruise deal and expansion
- all-inclusive resorts
- consumer packaged goods product mix
Companies and tickers mentioned
- DIS
- RCL
- GIS
- Walt Disney
- Royal Caribbean Cruises
- Sandals Resorts International
- General Mills
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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