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Disney+ annual pricing discount a ‘mistake,’ analyst says | FierceVideo

Disney’s investor day last week mostly drew positive reactions for the company’s streaming plans, but noted Disney critic Rich Greenfield today pointed out some potential flaws.

Greenfield, an analyst at BTIG Research, said that Disney is making a mistake with its discounted annual pricing for Disney+. The company last week announced that Disney+, which is arriving on Nov. 12 this year, will be priced at $6.99 per month or $69.99 per year. Greenfield said that the discount, which amounts to a 17% reduction down to $5.83/month, is in theory a good way to reduce churn. But he said the annual price is likely to see more uptake from higher income subscribers who are less likely to churn in the first place.

“Then add on the app store subscription tax on upwards of half of Disney+’s subscribers (we’re assuming a 15% tax, albeit year one could be higher). In turn, effective ARPU is probably closer to $6.25 in the U.S.,” wrote Greenfield in a research note. “Tough to make money at that level of ARPU.”

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Disney+ annual pricing discount a ‘mistake,’ analyst says | FierceVideo.

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