Disney is putting an end to its era of budget-friendly streaming packages and rapid subscriber growth. The company has announced substantial price hikes for its streaming services, with the cost of ad-free versions of Disney+ and Hulu increasing to double digits.
Additionally, Disney has pledged to tackle the issue of password-sharing, following in the footsteps of streaming competitor Netflix.
During an investor conference call to discuss the latest financial results, Disney’s Chief Executive Robert Iger explained that they are actively considering various solutions to address account sharing while ensuring that paying subscribers can still share their accounts with friends and family.
Price Increases
These price hikes arrive as Disney disclosed that its streaming business incurred significantly lower losses in the latest quarter compared to previous periods. However, its flagship streaming service, Disney+, experienced a decline in domestic subscribers for the second consecutive quarter.
As part of these changes, Disney has also raised prices for its Hulu Live television packages and introduced a new bundled offering called Duo Premium, combining Disney+ and ad-free Hulu for $19.99 per month. Previously, these services were available as stand-alone options or bundled with ESPN+ at the same price.
The upcoming price adjustments, scheduled for October, will see the monthly cost of the ad-free stand-alone Disney+ plan increase from its initial $6.99 in 2019 to $13.99. Likewise, the ad-free Hulu service will see its price rise from $14.99 to $17.99, surpassing the cost of similar ad-free plans from competitors like Netflix and Warner Bros. Discovery’s Max streaming platform.
Iger emphasized that the prices of ad-supported Disney+ and Hulu versions will remain unchanged in the U.S., as maintaining accessibility to a broad audience is a top priority for the company.
A Business Shift
Disney is currently grappling with the transition from traditional content distribution methods, such as movie theaters, network television, and physical media sales, to a streaming-centric approach. Since the launch of Disney+ in late 2019, the company’s direct-to-consumer segment, which includes Hulu and ESPN+, has incurred losses exceeding $10 billion.
Iger had previously acknowledged that the company had underpriced its streaming services in its eagerness to amass global subscribers. These price hikes come after the introduction of an ad-supported tier for Disney+ and a previous $3 increase in the cost of the ad-free version, both of which resulted in minimal cancellations and indicated room for further price adjustments.
What’s your take on Disney’s latest move to increase streaming prices? Are you willing to pay more?