Disney looks to replicate Hulu with ad-supported streaming service

Ben Barringer, equity research analyst at Quilter Cheviot, comments on Disney’s latest financial results: 

“Disney has followed the streaming trend by announcing it too will introduce an advertising-supported tier for customers later this year. Although it won’t be available internationally until next year, this is a positive step for investors and should see the company bring in further revenues given the ad-supported version will be priced where the current proposition is. With the ad-free version going up to $11 per month, from the current $8 per month, Disney is looking to replicate the success that Hulu has had with this model and give customers a range of options when it comes to their television viewing habits. 

“Elsewhere in the company, the parks business continues to see good demand and no hit from the macro-economic challenges facing the global economy. People continue to part with their cash at magic kingdoms around the world, and while international travel isn’t yet back to pre-pandemic levels, spending most certainly is. Hotel occupancy also remains good. 

“Disney remains a high quality company with a range of products and services to cater for most consumers. With its streaming model still very much in growth mode, unlike peers, we continue to like the company and the strong brand it brings. Clearly there are fears surrounding the economic slowdown and if consumer demand begins to fall and the streaming platform sees some churn, but the business has plenty of levers to pull to see it through the challenging period that is to come.”

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