Disney's Turning Its Attention to Streaming Profits

Last summer, Walt Disney (NYSE: DIS) raised the price of ESPN+ by $1 per month. This year, it's charging subscribers $3 more per month. The sports-centered (see what I did there?) streaming service will become Disney's most expensive at $9.99 per month, joining Hulu and Disney+, which start at $6.99 and $7.99 per month, respectively.

The price hike reflects the reality of growing content expenses for both ESPN and the rest of Disney's streaming efforts. Meanwhile, the slowdown in Netflix's (NASDAQ: NFLX) subscriber growth has many investors across the media industry scared that the direct-to-consumer market may not be as big as we thought just a couple of years ago. As such, investors and consumers should expect Disney to raise prices on Hulu and Disney+ faster to meet its long-term profit outlook.

Disney's direct-to-consumer segment saw its losses expand year over year last quarter, reaching $887 million in total. The biggest driver of the losses was higher programming costs, which increased 38% in aggregate to $3.6 billion in the second quarter.

Source Fool.com