In a bid to enhance profitability and adapt to evolving market demands, Disney has announced a series of pricing changes for its streaming services, Disney+, Hulu, and ESPN+. The adjustments, which include increases for the ad-free subscription tiers, will take effect in the coming months.
Starting October 12, the pricing landscape for Disney's streaming services will undergo significant transformations. The ad-free version of Disney+ will see a 27% increase, with its monthly cost being raised to $13.99. This decision reflects Disney's confidence in its content library's ability to compete with industry giants like Netflix and Warner Bros. Discovery's Max.
The price of Hulu's ad-free subscription will also experience a 20% hike, resulting in a monthly fee of $17.99. However, the prices for the ad-supported tiers of both Disney+ and Hulu will remain unchanged.
Disney CEO Bob Iger emphasized the company's interest in encouraging users to opt for ad-supported plans, highlighting the healthier advertising landscape for streaming platforms as compared to traditional linear TV. Notably, about 40% of new Disney+ subscribers have chosen the ad-supported tier.
In a move to provide consumers with bundled options, Disney is introducing a new "premium duo" offering that combines ad-free Disney+ and Hulu for $19.99 per month. This represents a $12 monthly savings compared to subscribing to both services separately. The bundle including Disney+ (no ads), Hulu (no ads), and ESPN+ (with ads) will now be priced at $24.99 per month.
“The strong momentum of our ad-supported plans in the U.S. demonstrates the importance of providing consumers with choice, flexibility, and value,” Joe Earley, president of direct-to-consumer for Disney Entertainment, said in a press release.
“We are excited to expand that offering in more markets across the globe, including in Europe and Canada, and to launch a new premium duo bundle of ad-free Disney+ and Hulu this fall, as we take steps toward making extensive Hulu content available via Disney+ later this year for Bundle subscribers.”
It's worth noting that Disney's previous price adjustments have not led to significant cancellations, a trend that the company hopes will continue with this latest round of changes. While concerns regarding the impact of ongoing Hollywood labor strikes on Disney's content pipeline loom, the company is confident that consumers will recognize the value of its streaming services and be willing to pay slightly higher prices.
However, it's not just the pricing that's undergoing changes. Disney's announcement also included plans to enforce rules against password sharing for Disney+ starting in 2024. Similar to Netflix's approach, Disney+ might implement measures that require additional payment for subscribers who wish to share their accounts with friends and family.
The adjustments come as Disney reported a loss of $512 million in its streaming division for the third quarter. Despite this, Disney+ continues to attract subscribers, with a subscriber base of 105.7 million, excluding Hotstar, and about 146 million worldwide.
