Disney+ confirms price increases coming in December

It’s Disney plus ads or $3 a month…

by Ian Collen
Movies & TV Shows News

87

Disney+ confirms price increases coming in December

Disney has surpassed Netflix in terms of paid subscribers to become the number one streaming provider on the planet, but it has also announced that its upcoming ad-supported pricing tier will be accompanied by a hefty price increase.

In its latest financial report, Disney recorded a combined total of 221.1 million subscribers across its platforms at the start of July, fractionally ahead of the 220.6 million that Netflix had recently listed in its own quarterly report. Although Disney+ will have played a large part in those numbers (152.1 million), it’s worth noting that the figure also includes Hulu (46.2 million) and EPSN+ (22.8 million), so Netflix still holds the top spot as a single streaming service.

That said, Disney+ added 14.4 million subscribers in the period from April to 02 July (which was Disney’s own fiscal third quarter rather the Q2 period to the end of June), at a time when Netflix was losing nearly a million, and follows an 8 million increase from the previous quarter – where Netflix saw its first drop in subscribers for a decade.

Disney+ confirms price increases coming in December

As part of the announcement, Disney also confirmed plans for an ad-supported pricing tier to launch from 08 December, most likely just in the US to begin with. The bad news is that the introduction of the new tier looks set to coincide with a sizeable price rise – with a Walt Disney Company press release announcing that a Disney+ subscription will increase from $7.99 to $10.99 a month (or $109.99 per year), with the ad-supported tier coming in at the existing $7.99 price point, so users are not going to end up paying any less than they currently are.

Back in March Disney announced its plans to launch an ad-supported tier for Disney+ in the US by the end of the year, “with plans to expand internationally in 2023”, so while the other regions won’t be seeing the increases in 2022, we’d imagine they won’t be too far behind. The current UK subscription is £7.99 a month (£79.90 a year) and it’s not a stretch to assume the same increases we'll see in the US will apply here, along with other regions as and when the changes rollout around the world. So, it seems like we’ll all be getting the choice to stick with what we’ve got, but with the additional adverts dropped in, or pay an extra $3 (or £3) a month to avoid having to sit through them.

Of course, Netflix has also announced an ad-supported pricing tier is on the way, although the suggestion there was that adverts wouldn't added to the existing service, with it simply being a cheaper alternative – so it will be interesting to see whether these announcements (and the now-confirmed timeframe) changes those ongoing plans, or what the rest of the competition might have in mind. We're sure they'll all be watching the subsequent subscriber numbers and financial reports very closely.

Disney+ confirms price increases coming in December
Disney+ confirms price increases coming in December

As for Disney's portfolio, there’ll also be similar increases for Hulu, with the cheapest, ad-supported tier increasing from $6.99 to $7.99 ($79.99 per year) from 10 October, with its ad-free tier jumping from $12.99 to $14.99. A previously announced price hike for its ESPN+ service will also see those monthly payments go up from $6.99 to $9.99 ($99.99 per year) from 23 August with ads staying very much in place. Unsurprisingly, this will also see any ‘bundle’ plans also increasing, with ad-supported packages starting at $9.99 (for Disney+ and Hulu), rising up to the Premium bundle containing Disney+, Hulu, and ESPN+ at $19.99 – though that still includes ads for ESPN+.

Quite how this will all impact on the current rise in subscribers remains to be seen, although Disney has lowered the forecast for its expected numbers for 2024 from 230-260 million to 215-245 million. However, the company doesn’t’ seem to be too threatened by any potential drop-off, despite also posting losses of more than $1 billion for its streaming sector in the last quarter. This is largely because it also announced profits of $1.5 from across its other businesses, up 26% from the same period last year (a post-lockdown summer has seen a surge in visitors to its theme parks, for example).

With those additional profits set to rise, and the increase in advertising revenue for the new pricing tier further adding to its income, we’d imagine Disney can afford to lose a few subscribers and it still seems confident that Disney+ will start turning a profit before the end of its 2024 financials. Not that this is likely to make existing subscribers feel any happier about either the arrival of ads to their existing service, or the further price increase required to avoid them in the current financial climate.

Disney+ confirms price increases coming in December

The announcement follows the recently-confirmed UK price rise for Amazon Prime, while Warner Bros Discovery revealed plans to combine Discovery+ and HBO Max into a single platform, as the streaming sector continues to battle for an audience share in an increasingly competitive market. Will the changes to Disney+ and its siblings be enough to cause subscribers to look elsewhere? Or is the ad-supported tier an acceptable (if not agreeable) way to avoid having to face a price increase?

SOURCE: The Walt Disney Company (via press releases / Investor Relations)
IMAGES: Disney+ / The Walt Disney Company

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