In a strategic move to steer its streaming business toward profitability, Disney is executing substantial price hikes for its standalone premium plans on Disney+ and Hulu in the United States. Concurrently, the entertainment juggernaut is introducing a compelling discounted bundle, combining Disney+ and Hulu in an ad-free package.
Effective October 12th, the pricing landscape for U.S. customers is set to shift. Disney+ Premium, boasting a pristine ad-free experience, will undergo a notable 27% surge, elevating the monthly fee from $10.99 to $13.99. In tandem, Hulu's ad-free subscription will experience a 20% upswing, ascending from $14.99 to $17.99 per month. Meanwhile, the rates for ad-supported standalone tiers on both Disney+ and Hulu will remain steadfast at $7.99 each per month, and the attractive bundle of the two services will retain its $9.99 monthly pricing.
Beyond just these price modifications, the Hulu + Live TV offerings are also slated for adjustments. Effective October 12th, both packages will encounter a $7 increase in monthly costs (ad-supported tier up to $76.99, and ad-free Video on Demand tier up to $89.99). Even the pricing structure of ESPN+ is poised for a minor uptick, rising by a dollar from $9.99 to $10.99 monthly.
The global expansion is another integral facet of Disney's strategic plan. Beginning November 1st, the ad-supported Disney+ plans are set to roll out in Canada, the U.K., and eight other European nations. Monthly subscription rates are fixed at $7.99 in Canada, £4.99 in the U.K., and €5.99 in European markets such as France, Germany, Switzerland, Italy, Spain, Norway, Sweden, and Denmark. Disney has also announced forthcoming price hikes for the ad-free Disney+ offerings in these regions, effective December 2023.
CEO Bob Iger, during an earnings call, revealed that the ad-supported version of Disney+ secured 3.3 million subscribers since its U.S. debut in December 2022. However, Iger also highlighted Disney's intent to address the issue of illicit password-sharing, with plans to unveil strategies by 2024, aiming to counteract this prevalent challenge.
These pricing adjustments mark the second price hike within a year for Disney+ Premium in the U.S. Following a $3 per month surge in December 2022, with the introduction of the ad-supported version, the fee will have doubled from its original $6.99/month price four years ago. Simultaneously, Disney is taking an assertive stance on promoting streaming bundles, with a new ad-free bundled subscription plan scheduled to launch on September 6th. This combined Disney+ and Hulu package, priced at $19.99 per month, represents a significant 37% discount from the standalone plans.
Looking forward, Disney's concerted efforts to align pricing with content value seem to be a recurring theme. With an eye on integrating Hulu and Disney+ app experiences, the company continues to navigate the evolving streaming landscape, evident in its recent earnings call. As the Direct-to-Consumer streaming segment narrows operating losses, and Disney+ garners 105.7 million subscribers worldwide, the streaming giant is at the precipice of a transformative phase, seeking profitability amidst an ever-evolving digital entertainment realm.
