Disney’s Bold Move: Strategic Genius or Overreach in 2025?
House of Mouse pushes boundaries with latest controversial pivot.
THE METAVERSE GAMBLE
Disney's aggressive Web3 expansion raises eyebrows across traditional entertainment sectors. The company's NFT collection drop shattered records—moving $10M in minutes while legacy media competitors watched from the sidelines.
STREAMING WARS ESCALATE
Their blockchain-based content distribution model bypasses conventional platforms entirely. Cutting out middlemen? Bold. Potentially alienating existing partners? Risky.
WALL STREET'S CYNICAL TAKE
Because nothing says 'stable growth' like betting the magic kingdom on volatile digital assets—meanwhile shareholders nervously check their portfolios between churro bites.
The entertainment giant's high-stakes play could redefine digital ownership—or become a case study in corporate overreach.
Stream weaver
Will subscribers pay up? Disney investors need to ask themselves that question, especially now when the streaming business is a major contributor to the overall business on both ends of the income statement.
There were 183 million Disney+ and Hulu subscribers at the end of June. The $6.2 billion that the direct-to-consumer business generated in revenue for Disney's fiscal third quarter was almost triple the $2.3 billion delivered by its legacy linear networks. The operating profit for Disney's linear networks was double the streaming operations, but these are passing ships. The 6% year-over-year increase in revenue on the streaming side was more than enough to offset the 15% slide for the linear networks. Disney+ and its other streaming offerings weren't even profitable until a year ago, and the difference over the past year offset the sharp decline in operating profit for its legacy networks.
The migration to streaming is finally working financially for Disney. A price hike WOULD boost the bottom line even more, as long as churn doesn't spike. The dramatic hike in subscription rates next month in an iffy economy is a gamble. It also comes following nearly a week of folks calling for a boycott in light of the suspension of the Jimmy Kimmel Live! late-night talk show.
The suspension ended on Tuesday night, with the show returning to most ABC affiliates. In a clever close to the show's opening monologue -- that will delight Disney investors -- an emotional Kimmel pulled a sheet out of his pocket, explaining that Disney wanted him to read one thing in exchange for the return of the show. Instead of an apology or boilerplate legalese, Kimmel read the instructions to reactivate canceled Disney+ and Hulu subscriptions.
Image source: Getty Images.
Disconnecting the connected-TV market
Disney's streaming hikes were not across the board. Some options are remaining the same. In a surprising twist, come Oct. 21 it will still cost subscribers to the Disney+ and Hulu bundle without ad breaks $19.99 a month, just a buck more than the same package with Disney+ alone. It's a $4 difference today.
introduced an ad-supported tier three years ago. A few months later it suggested that the ad revenue it was generating from the cheaper plan was enough to offset the $8.50 monthly difference between the plans. The news led to an increase in demand for streaming service stocks and connected-TV advertising players. Disney's new pricing implies that the entertainment stock bellwether is changing its approach.
The Disney+ and Hulu bundle with ads option will go from $10.99 to $12.99 a month in October. The $9 monthly gap between the ads and the ad-nots is narrowing to $7 next month. Is Disney trying to get ahead of a potential softening in the economy that could hurt the connected-TV advertising market, or is this just a tactical MOVE to get subscribers back to the higher-priced ad-free option? Is this just a way to blur the potential subscriber hit that may have taken place over the past week if those who canceled don't come back? Disney just became even more interesting for the quarter ahead.
