Disney is raising the prices for nearly all of its streaming services, hoping to accelerate profitability. The company's earnings report released on Wednesday showed third-quarter revenue of $22.33 billion and Disney+ streaming service subscriptions dropping to 146.1 million, both below analysts' expectations.
Starting October 12, the monthly fee for the ad-free Disney+ will increase by 27% to $13.99, while the ad-supported Disney+ will remain at $7.99 per month. The monthly fee for ad-free Hulu will increase by 20% to $17.99, with the ad-supported Hulu maintaining its price at $7.99 per month.
In May last year, Disney raised the monthly cost of Disney+ by $3. During the earnings call that month, Disney CEO Bob Iger stated that despite the significant price increase for the ad-free Disney+ products, the number of subscribers lost was minimal.
Despite the threat to its content from the Hollywood writers and actors' strike in the coming months, buoyed by the confidence from minimal subscriber loss after the price increase last May and the anticipation that consumers are willing to pay more for streaming services, Disney decided to align Disney+'s pricing with Netflix and Max, even charging more for Hulu.
Disney's decision to increase the prices of nearly all streaming products indicates the company's belief that its content library can compete with Netflix and Max. When Disney+ was launched in 2019, to capture market share and users from Netflix and Max, Iger intentionally set the price of the family product at $6.99 per month, almost half the price of Netflix.
In addition to raising the prices of individual products like Disney+ and Hulu, Disney also implemented proportional price increases for multiple streaming product bundles. Additionally, starting November 1, Disney will expand its advertising services in specific markets in Europe and Canada.
The service bundle of Disney+ (ad-free), Hulu (ad-free), and ESPN+ (with ads) will increase from $19.99 to $24.99 per month. The price of the ad-supported Hulu + Live TV bundle will rise from $69.99 to $76.99 per month. The ad-free Hulu + Live TV bundle will increase from $82.99 to $89.99 per month.
For those who wish to use both the ad-free versions of Disney+ and Hulu, they can now enjoy a new "premium" service bundle for $19.99 a month. The price of the ad-supported Disney+ and Hulu bundle will continue to remain unchanged at $9.99 per month.
