Disney+ Introduces Yet Another Price Hike
Amid a decline in its subscriber base, Disney is implementing price increases for its online streaming services, marking its second price hike within a year. The initial increase in subscription fees for offerings like Disney+ and Hulu occurred in October of the previous year.
In addition, Disney is introducing a new ad-free bundle of Disney+ and Hulu for $19.99 per month, while the ad-supported tiers for both services will remain at $7.99 per month. These new prices will take effect from October 12.
Over the past three months, Disney+ experienced a slight decrease in its domestic subscriber base in the U.S. and Canada, from 46.3 million to 46.0 million. The most significant subscriber drop occurred in India, where Disney+Hotstar went from 52.9 million paid users to 40.4 million due to losing the digital rights to stream the Indian Premier League (IPL) cricket tournament. Competing against this, Reliance-owned JioCinema offered free streaming of the IPL to attract users.
CEO Bob Iger acknowledged the Hotstar subscriber decline but indicated that it does not significantly impact the company's overall direct-to-consumer financial results, as the service in India generates lower revenue per user than the core Disney+ service.
Iger also highlighted the expansion of the ad-supported service to more countries, including Canada and Europe, beginning November 1st. He mentioned that a new ad-free bundled subscription plan featuring Disney+ and Hulu will be introduced in the U.S.
The revised pricing for Disney's streaming services is as follows:
Disney+ (ad-free): $13.99 per month, up from $10.99 per month
Hulu (ad-free): $17.99 per month, up from $14.99 per month
ESPN+ (with ads): $10.99 per month, up from $9.99 per month
Disney+, Hulu, and ESPN+ (all ad-supported): $14.99 per month, up from $12.99 per month
Disney+ (ad-free), Hulu (ad-free), and ESPN+ (with ads): $24.99 per month, up from $19.99 per month
Yesterday, Disney unveiled a $2 billion agreement with Penn Entertainment, a move that will lead to the rebranding of its sportsbook as ESPN Bet. Additionally, CEO Bob Iger mentioned that the company is actively seeking digital distribution and technology partners to enable the direct-to-consumer availability of ESPN.
Iger stated, "The shift to bringing our flagship ESPN channels directly to consumers is not a matter of if but when. Our team is diligently examining all aspects of this decision, including pricing and timing. It's noteworthy that despite the increasing trend of cord-cutting, ratings on ESPN's primary linear channel are on the rise."
While Disney's revenue experienced a 4% year-on-year growth, reaching $22.33 billion, it slightly fell short of Wall Street's projected figure of $22.53 billion for the quarter ending in June.