Earlier surveys found 23% of Disney+ subscribers would change their subscription if prices increased 38%, but only 6% actually did. Why do people behave differently than how they say they would?
It’s strange to think maybe they’ve priced on the inelastic part of demand in the first place. Which I’m assuming is the case if they can raise price 38% without losses.
Earlier this month Iger had announced that they messed up on the initial pricing: "In our zeal to grow global subs, I think we were off in terms of our pricing strategy, and we’re now starting to learn more about it and to adjust accordingly."
Maybe this price change was what made them realize JUST how off they were. You'd think losing 4 billion per year on streaming would have been enough of a signal.
Maybe they were doing one of those leader things. If demand is inelastic, and switching very costly and membership sticky, for all I know you want to give it away, get people hooked, and then raise the price accordingly. But I guess too pricing is based on market demand and as the market grows, those elasticities will shift requiring adjustments in pricing.
It’s strange to think maybe they’ve priced on the inelastic part of demand in the first place. Which I’m assuming is the case if they can raise price 38% without losses.
Earlier this month Iger had announced that they messed up on the initial pricing: "In our zeal to grow global subs, I think we were off in terms of our pricing strategy, and we’re now starting to learn more about it and to adjust accordingly."
Maybe this price change was what made them realize JUST how off they were. You'd think losing 4 billion per year on streaming would have been enough of a signal.
Anyway, great substack! Keep up the good work!
Maybe they were doing one of those leader things. If demand is inelastic, and switching very costly and membership sticky, for all I know you want to give it away, get people hooked, and then raise the price accordingly. But I guess too pricing is based on market demand and as the market grows, those elasticities will shift requiring adjustments in pricing.