Former Labor Secretary Alex Acosta told Newsmax on Monday that Disney is losing money on its streaming services, despite increasing its prices twice within the past year.
"Disney has said that it's considering selling or exiting the linear TV business," Acosta said during an appearance on Newsmax's "National Report." "You've seen other streaming companies like Netflix increase their prices and Disney … this is not the only increase that we've seen. Just last December, Disney increased its prices, so this is the second increase in under a year."
Disney CEO Bob Iger announced steep increases last week for the company's online streaming subscription services Disney+ and Hulu.
The monthly bill for Disney+ subscribers will reportedly go up by $3 to almost $14, representing a nearly 27% increase.
And the bill for Hulu, the company's virtual pay TV service, will similarly increase by $3 to $18 per month. The 20% hike will make Hulu the most expensive streaming basic TV service.
"It's worth mentioning, despite these increased prices, Disney is losing money on streaming," Acosta said. "A year ago it lost a billion. This time it announced that it reduced its losses to only $512 million for the quarter. That's still a lot of money. That's a lot of losses."
Acosta said Disney's startup costs "just are not keeping up" with the revenue the company is bringing in.
"It's not as profitable as they would like it to be," he said. "Disney claims that it will be profitable in under a year, but we're still seeing half a billion loss."
"The bigger issue here, I wonder, for Disney — if they could use that Disney magic to turn back time, would they get involved in politics the way they did?" he asked. "How much of the Disney brand has been damaged because of that decision to become involved in political issues rather than just stick to business the way it had done for decades after decades?"
Wading into the national culture wars and feuding with Florida Gov. Ron DeSantis over his "Parental Rights in Education Act" has not helped Disney's bottom line, with the company posting a net loss of $460 million in the most recent quarter; it posted a profit of more than $1.4 billion for the same quarter last year.
Customers are clearly changing the channel when it comes to Disney+ and Hulu, with the former streaming service shedding approximately 600,000 subscribers during the past two quarters.
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Nicole Weatherholtz ✉
Nicole Weatherholtz, a Newsmax general assignment reporter covers news, politics, and culture. She is a National Newspaper Association award-winning journalist.
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