Disney (NYSE:DIS) Chief Executive Officer Bob Chapek keeps making decisions that distance himself from his predecessor, Bob Iger.
Reports have circulated that Iger hasn’t agreed with several decisions Chapek has made as Disney’s CEO, including his reorganization of the company and his handling of Florida’s controversial “Don’t Say Gay” legislation.
The latest break is the 38% price increase for Disney+, announced last week as part of a slew of announcements surrounding Disney’s new advertising-supported service, which will launch on Dec. 8. Disney+, without ads, will increase from $7.99 per month to $10.99 per month. Disney+ with ads will begin at $7.99 per month.
Chapek’s pricing strategy differs from the philosophy Iger espoused, according to people familiar with both men’s thinking. Iger wanted Disney+ to be the lowest-priced major streaming offering, said the people, who asked not to be named because the discussions were private.
That way, customers would view Disney+ as a stronger value proposition to its competitors even if it felt other services’ content might be more robust. This is also why Iger argued to keep Disney+ separate from Hulu and ESPN+, a strategy Chapek has thus far maintained.
At $7.99 per month with ads, Disney+ will now be more expensive than several other ad-supported products, including NBCUniveral’s Peacock ($4.99) and Paramount Global’s Paramount+ ($4.99), though it will remain cheaper than Warner Bros. Discovery’s HBO Max ($9.99).
DIS shares tumbled $2.56, or 2.1%, early Monday to $117.58.
