Disney Raises Prices for Online Streaming Services
Disney is raising prices for its online streaming services across the board amid a declining subscriber base. This is the company’s second price hike in the last 12 months after it increased subscription fees for different offerings including Disney+ and Hulu last October.
List of Disney’s New Price Hikes:
- Disney+ (ad-free): $13.99 per month from $10.99 per month
- Hulu (ad-free): $17.99 per month from $14.99 per month
- ESPN+ (with ads): $10.99 per month from $9.99 per month
- Disney+, Hulu, and ESPN+ (all ad-supported): $14.99 per month from $12.99 per month
- Disney+ (ad-free), Hulu (ad-free), and ESPN+ (with ads): $24.99 per month from $19.99 per month
The company is also introducing a new ad-free bundle of Disney+ and Hulu at $19.99 per month. Ad-supported tiers for both services will remain at $7.99 per month. Disney said that these new tariffs will be applicable from October 12.
Disney+’s domestic subscriber base across the U.S. and Canada dipped from 46.3 million to 46.0 million in the last three months. Notably, the biggest subscriber drop was in India as Disney+Hotstar went from 52.9 million paid users to 40.4 million paid users. This was mainly due to the company losing digital rights to stream the Indian Premier League (IPL) cricket tournament. Reliance-owned JioCinema streamed IPL for free to attract more users. Hotstar has announced a similar move for the upcoming One-day Cricket World Cup starting in October.
CEO Bob Iger, who returned to lead the company last year, however, asked investors to not focus on the Hotstar subscriber drop as it is “not a material component of our overall D2C financial results” because the service in India fetches lower revenue per user that the core Disney+ service.
Iger also noted that the company is expanding its ad-supported service in more countries including Canada and Europe. Last December, the company launched the ad-fueled tier in the U.S. to compete with a similar offering from Netflix.
“I’m pleased to share that our ad-supported Disney+ subscription offerings will become available in Canada and in select markets across Europe, beginning November 1st, while a new ad-free bundled subscription plan featuring Disney+ and Hulu will be available in the U.S,” he said during the earnings call.
Yesterday, Disney announced that it has struck a $2 billion deal with Penn Entertainment to rebrand its sportsbook to ESPN Bet. Iger added that the company is also looking for digital distribution and technology partners to take ESPN direct to consumers.
“Taking our ESPN flagship channels direct-to-consumer is not a matter of if but when. And the team is hard at work looking at all components of this decision, including pricing and timing. It’s interesting to note that ratings continue to increase on ESPN’s main linear channel even as cord-cutting has accelerated,” he said.
Disney’s revenue grew 4% year-on-year at $22.33 billion. However, it fell short of Wall Street’s expectation of $22.53 billion for the quarter ending in June.
