The Walt Disney Company (DIS) announced a series of price hikes for almost all its plans and some content curation strategies to enhance user engagement in its streaming business. The surprise news comes just ahead of its much-anticipated Q3 FY24 results expected before the market opens today. Disney is currently basking in the box office success of the Marvel universe’s Deadpool & Wolverine movie. Meanwhile, Inside Out 2 also made a mark at the box office.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Disney Hikes Streaming Prices
Disney has increased the prices by $1 or $2 on each of its subscription plans. For the flagship Disney+ streaming service, Disney raised the price by $2 per plan for both ad-free and ad-tiered services, making them $15.99 and $9.99 per month, respectively. Similarly, Hulu’s ad-free premium version becomes a dollar costlier at $18.99, while the ad-supported service notches up by $2 to $9.99 per month.
At the same time, Disney’s most-loved trio bundle, which includes Disney+, Hulu, and ESPN+, will now see a hike of $2 per month for both ad-free and with ad streaming plans, resulting in prices of $26.99 and $16.99 per month, respectively.
Disney has made similar revisions in other popular plans. The revised prices are expected to take effect from October 17. Streaming companies are vying to garner more subscribers by making attractive bundles. Recently, Warner Bros. Discovery (WBD) announced a bundle of its Max service with Disney+ and Hulu.
Disney’s Content Curation Strategy
Apart from the price hikes, Disney is undertaking a targeted content curation strategy to boost viewership and ensure that viewers spend longer hours on its channels. Accordingly, Disney is set to introduce “continuous playlists” on Disney+ beginning September 4.
These playlists will feature continued streaming of popular curated content. For beginners, Disney will start the continuous playlist on the ABC News Live channel and one targeted for preschool kids, which will showcase Disney+ shorts such as “Sofia the First,” “The Lion Guard” and “Puppy Dog Pals.”
Furthermore, Disney will launch four more playlists in the fall, which will include different genres such as seasonal content, action shows from popular series such as Star Wars and Marvel, “nostalgic pop culture content,” and a “true stories” channel focused on documentaries and biopics.
Additionally, Disney is changing the suggestion algorithm and adding more customized marketing tools and email notifications for users. For instance, a user who stops watching a series in between will be sent reminders to finish it.
Retail Investors Are Dumping DIS Stock
Despite Disney’s growth strategies, TipRanks’ Stock Investors tool shows that retail investors are dumping the stock ahead of the results. DIS has a Very Negative Investor Sentiment signal, as the number of portfolios holding DIS stock has declined by 0.5% in the last seven days and 1.8% in the last 30 days.
Is Disney a Buy or Sell?
Meanwhile, Wall Street is highly bullish about Disney stock’s trajectory. On TipRanks, DIS has a Strong Buy consensus rating backed by 21 Buys versus five Hold recommendations. The average Walt Disney Company price target of $126.64 implies 40.8% upside potential from current levels. Meanwhile, DIS shares have lost 8.8% in the past six months.
