Disney Hikes Streaming Prices

Investing News

In its latest results, Disney said it added 14.4 million subscribers to Disney+ in the fiscal third quarter, bringing total subscribers to 152.1 million—higher than the 147 million analysts had expected. However, at the same time, its direct-to-consumer division, which includes the streaming units, lost more money than in previous years. According to Disney, rising production costs for Disney+ and higher sports programming costs for ESPN+ contributed to the losses.

In addition to reporting earnings results and more streaming customers than expected, Disney announced that it is raising the price of its ad-free streaming service by 38%. Disney+ will cost $10.99 per month, up from its current price of $7.99 per month. The increase starts on December 8 in the U.S. 

Disney will soon include a $7.99 per month ad-supported tier, as Disney tries to restructure its pricing options.  

Disney is also raising the price of Hulu subscriptions. The ad-free tier will jump from $12.99 per month to $14.99, while the ad-supported version will cost $7.99 per month, up from $6.99 per month. The new pricing will go into effect in October. A price hike for ESPN+ streaming was announced in July, raising the monthly price from $6.99 per month to $9.99.

Shares of Disney (DIS) are down 28% year-to-date.

“Disney finds itself in the rare position of being able to grow subscribers to Disney+ and raise prices without worrying too much about customer churn. Netflix, on the other hand, is losing subscribers after a series of price hikes. That said, Disney still needs its theme-park business to show stronger growth if it wants to convince investors that its best days are ahead,” said Caleb Silver, Editor-in-Chief of Investopedia.

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