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Disney+ has announced that its new $7.99 per month ad-supported subscription tier will launch in the US on December 8. It should be familiar if that pricing point looks familiar. Consumers currently pay that amount without advertisements.
The largest price rise for the channel since its November 2019 launch will now take place on the Disney+ premium tier without advertising, which will increase by $3 to $10.99 per month. In March 2021, prices increased by $1.
The price hike for Disney comes after a successful quarter for the program. The service attracted 14.4 million members in the third quarter, beating Wall Street predictions. There are currently 152.1 million users of the program.
After-hours trading saw shares rise as much as 6.5% in response to the results.
Regarding the company’s total profits, Disney (DIS) announced second-quarter sales of $21.5 billion, up 26% over the same period the previous year, and a net profit of $1.4 billion, up 53%.
Disney stated that 221 million people have subscribed to its various streaming services. In addition, 220.6 million people use Netflix.
By the conclusion of the fiscal year 2024, Disney revised its long-term forecasts from 230 million to 260 million subscribers. In addition, it updated its projection on Wednesday, estimating that its main product would have 135 million to 165 million users and that its Disney+ Hotstar service in India may have up to 80 million.
Why Disney+ is increasing its prices
The price of Disney streaming services is rising overall, not just Disney+. With a price increase of $1 to $7.99 for its ad-supported tier and $2 to $14.99 for Hulu without commercials, Hulu—which is owned mainly by Disney—will also.
The premium Disney Bundle, which combines ESPN+ with the company’s streaming services Disney+ and Hulu without advertisements, is one package that won’t see a price increase. However, it still costs $19.99.
This action seems to be Disney’s attempt to get customers to sign up for all of its services rather than just one. A three-service bundle that costs only $9 more per month than Disney’s largest service is also difficult to refuse financially.
Additionally, Disney is launching two new bundle plans: For $9.99, you can get Disney+ and Hulu with commercials; for $12.99, you can get all three services with ads.
Media corporations’ new priority appears to be connecting streaming services.
Consider Warner Bros. Discovery as an illustration. The parent company of CNN revealed last week that it would merge HBO Max and Discovery+ in the summer of 2019.
Read Also: Disney overtakes Netflix in the battle for subscribers
If the “Streaming Wars” were the first stage of the streaming revolution, which began around 2017, the subsequent stage could be referred to as the “Rumble of the Bundles.”
Therefore, why is your streaming budget likely to suffer another blow? It’s because it costs a fortune to create a profitable streaming business.
Services like Disney+ invest millions, if not billions, on developing new content that draws in both current and potential users and the pricey infrastructure needed to keep it all running smoothly. Display A: In the third quarter, Disney’s direct-to-consumer operation lost $1.06 billion, nearly four times as much as it did a year earlier.
Streaming growth has also begun to mature, i.e., expand more slowly. As a result, the king of streaming, Netflix, saw a decline in subscribers for two consecutive quarters this year.
It has grown more difficult for businesses in the sector to acquire new members, and if subscription growth is slowing, revenue must come from another source. One simple method for doing it is to raise prices. And given the size of their collection, Disney can get away with this kind of pricing rise.
Some of the most well-known entertainment franchises, such as Marvel Studios, Pixar, Disney Animation, and Star Wars, may be found on Disney+. Among other popular content, Hulu also features movies from 20th Century Studios and TV series from FX.
Other than streaming
Disney’s successful third quarter wasn’t only due to its streaming services. The business’s parks, experiences, and goods division had a very successful quarter, pulling in $7.3 billion in sales, an increase of 70% over the same period the previous year.
Disney said that “increases in attendance, occupied room nights, and cruise ship sailings” were to blame for this.
