Disney's (DIS 0.18%) streaming price hike is doing exactly what management had hoped for.

The media giant raised its prices across the board late last year, pushing Disney+, Hulu, and ESPN+ subscribers to pay more each month. Naturally, investors expected subscriber growth to slow to a halt, and management provided an outlook for modest subscriber growth for the first quarter. But Disney managed to outperform, notably adding 1.4 million Disney+ core subscribers, including 200,000 domestic subscribers.

There are several areas where Disney's price hikes are working out better than expected for investors. Here's how.

Pushing more consumers to the bundle

The only subscription option Disney didn't raise its pricing on last year was the bundle of Disney+, ESPN+, and Hulu, and many consumers have noticed.

It's no surprise Disney noted "a higher mix of subscribers to multi-product offerings" in the earnings report. That higher mix contributed to lower average revenue per Disney+ subscriber for the quarter versus the previous quarter. But with less than one month of the new pricing last quarter, that should bounce back quickly in the second quarter.

The bundle plays a very important role in Disney's strategy. "The bundle drives higher total company subscription revenue and higher long-term subscriber value due to notably lower churn," CFO Christine McCarthy said during Disney's fourth-quarter earnings call in November.

Indeed, direct-to-consumer revenue climbed $400 million sequentially with the help of Hulu and ESPN+. Combined with a reduction in SG&A expenses, that led to a reduction in operating losses of $400 million.

Moving toward profitability faster than anticipated

After losing nearly $1.5 billion in the fourth quarter, Disney's making progress in pushing the direct-to-consumer business toward profitability.

First-quarter improvements in operating losses for the direct-to-consumer segment were better than expected. Management expects another $200 million improvement this quarter. That would bring its operating loss to about $850 million for the quarter.

Driving that improvement will be additional revenue growth, stemming primarily from improved revenue per user and modest subscriber growth. Subscriber growth should pick up in the back half of the year, continuing to push operating losses down.

What's more, management reiterated its expectations for Disney+ to achieve profitability by the end of 2024. Many investors expected the company to push out that timeline following Bob Chapek's ousting and Bob Iger's comments about the streaming business. But management apparently liked what it saw last quarter.

Iger said reaching profitability for Disney+ is his No. 1 priority. To that end, he plans to focus on the core brands and franchises that drive results while curating general entertainment content to just the most valuable series and films. He said investors (and consumers) should also expect more pricing adjustments.

Disney is quickly moving in the right direction. Combined with its broader efforts to cut costs, Disney should show strong profit growth over the next couple of years. With shares still trading well off their high, there's still an opportunity to buy shares.