In the world of consumer entertainment, unfortunately, price hikes tend to be the rule and not the exception. The latest example of this is Walt Disney (NYSE:DIS), which for the first time has increased the price of its hot Disney+ streaming service.
The hike takes effect this Friday. Customers who pay on a month-to-month basis will see their rates rise by $1, from $6.99 to $7.99 per month. Those who pay annually will get a bit of a break, with the one-year subscription climbing $10 to $79.99.
Subscribers of the expanded package, which bundles fellow Disney-owned streamers Hulu and ESPN+ with Disney+, will also be hit with a $1 per month hike starting Friday, to $13.99.
Disney+ is an obvious target for an upward price adjustment. The service has very quickly amassed a huge user base (over 100 million subscribers, as of earlier this month), who likely won't consider a maximum $1 per month increase to be a deal breaker keeping them from the delights of WandaVision or Toy Story on demand.
That sharp, sudden boost in revenue will also help make up for the company's struggles during the pandemic. While Disney+ has been a hit during the outbreak, Disney's studio entertainment division (i.e., movies) took it on the chin due to cinema closures, as did the parks, experiences, and products unit due largely to theme park shutdowns.
Investors certainly aren't spooked by the Disney+ price increases; on Thursday, Disney stock outpaced the 0.5% gain of the S&P 500 by closing 1.2% higher.