Disney is raising the price of its ad-free Disney+ subscription to $13.99 per month and plans to launch a premium duo that includes ad-free Hulu for $19.99.
The price hike represents a 27% jump from the current price of $10.99 and will take effect on October 12.
Disney is also raising the price of ad-free Hulu to $17.99 per month, which is 20% more than the current $14.99 offer.
But it offers a savings of $12 per month for those who want both subscriptions with a new $19.99 joint offer.
It comes after Disney CEO Bob Iger vowed to crack down on password sharing as the company seeks to boost profits following the release of its third-quarter financial results.
Disney will increase the price of the ad-free Disney+ subscription to $13.99 per month and plans to launch a premium duo with Hulu ad-free for $19.99. Pictured: CEO Bob Iger
The price hike represents a 27% jump from the current price of $10.99 and will take effect on October 12.
It comes after Disney CEO Bob Iger vowed to crack down on password sharing as the company seeks to accelerate profitability
Netflix’s standard ad-free plan is priced at $15.49 per month and Warner Bros. Discovery Max is $15.99.
Disney’s decision to raise its Disney+ price to a similar level and charge more than its competitors for Hulu shows the company believes its content can compete.
The company also increased the price of its trio pack of Disney+, ad-free, Hulu ad-free, and ESPN+ with ads to $24.99 per month from $19.99 per month.
The same plan with ads will increase from $2 to $14.99 per month.
While the cost of Hulu + Live TV with ads will drop from $69.99 to $76.99 per month and the ad-free service will drop to $89.99 per month from $82.99 per month.
Disney+ launched in 2019 at the deliberately low price of $6.99. The company increased the cost by $3 per month last year.
At the time, CEO Iger said, “We were pleasantly surprised that the loss of subscriptions, due to what was a substantial price increase for the non-ad-supported Disney+ product, was de minimis.
“It was a loss, but it was relatively small. This leads us to believe that we do, in fact, have price elasticity.
Disney chief Igor also revealed that the company is now prioritizing ways to turn those who use other people’s accounts into paying customers.
“We are actively exploring ways to address account sharing and the best options for paying subscribers to share their accounts with friends and family,” he said on a quarterly earnings call from Disney Wednesday.
Disney+ launched in 2019 at the deliberately low price of $6.99. The company increased the cost by $3 per month last year and was surprised that it led to minimal cancellations
Disney is increasing the cost of ad-free Hulu to $17.99 per month, a 20% increase. But it’s saving $12 a month with Disney+ with a new $19.99 joint deal.
Disney chief Igor revealed the company is prioritizing ways to turn those who use other people’s accounts into paying customers
“Later this year, we’ll begin updating our subscription agreements with additional terms on our sharing policies, and we’ll roll out tactics to drive monetization in 2024.”
Disney’s subscription agreements for Disney+, ESPN+, and Hulu currently state that customers cannot “share your login credentials with third parties.”
But it does not specify whether users are allowed to share passwords with friends and family members from different households.
When asked how widespread the problem was on Disney streaming services, Igor replied, “I’m not going to give you a specific number except to say it’s significant.”
“What we don’t know, of course, is that as we get down to work, how much of the password sharing, as we’re basically eliminating it, will convert to penny growth. -sailors. Of course, we believe there will be, but we’re not speculating.
“What we are saying, however, is that in Calendar 24 we are going to address this issue.
“And so, while it’s likely that you’ll see some impact in Calendar 24, it’s possible that we won’t be finished or the work won’t be completed within the calendar year.
“But we have certainly established that as a real priority. And we actually think there’s an opportunity here to help us grow our business.
Wednesday, Disney’s financial results for the third quarter.
It beat Wall Street estimates for adjusted earnings per share and the company said it was on track to cut costs by more than $5.5 billion it promised investors in February.
But the company missed Wall Street’s revenue targets and lagged slightly behind the expectations of US Disney+ subscribers, although it cut losses significantly.
It faces eroding TV business and a movie box office that has yet to recover to pre-COVID levels.
Disney said it narrowed losses from its video streaming services to $512 million in its fiscal third quarter, less than its loss of about $1.1 billion a year ago.
It added 800,000 Disney+ subscribers, 100,000 subscribers shy of analysts’ estimates and lost 12.5 million subscribers to the Disney Hotstar service in India, nearly a quarter of its subscribers, as it gave up rights to Indian Premier League cricket matches.
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Disney reported revenue of $22.33 billion for the quarter ended July 1, up 4% from a year ago but below Wall Street’s average estimate of 22 $.5 billion, according to Refinitiv data.
It generated earnings per share of $1.03, excluding certain items, beating Wall Street projections of 95 cents per share.
It was not immediately clear whether the adjusted profit figures were calculated on a comparable basis.
The company took $2.65 billion in impairment and restructuring charges in the quarter, reflecting the cost of removing certain content from its streaming services, terminating licensing agreements and $210 million in severance pay for laid-off workers.
Disney’s traditional television business continued to decline, with declining revenue and operating profit across the company’s broadcast and cable television businesses.
Rising sports program production costs, coupled with declining affiliate revenues, weighed on the performance of its cable channels.
TV revenue for the quarter fell 7% to $6.7 billion, while operating profit fell 23% to $1.9 billion.
Disney’s direct-to-consumer business saw a 9% increase in revenue to $5.5 billion, as average revenue per subscriber rose at Disney+ and Hulu.
Content Sales and Licensing, the unit that includes film and television sales, posted a larger operating loss of $243 million in the quarter, compared to a loss of $27 million a year ago. one year old.
Disney’s Parks, Experiences and Products group reported a 13% increase in revenue in the quarter to $8.3 billion and an 11% increase in operating profit to $2.4 billion.
