Disney+ subscription will have a price increase, the company announced after its fiscal Q3 webcast. No, this isn’t a repost from last year; the US entertainment conglomerate is really hiking up the prices for a second time in the last two years.
For now, only the US market will be affected, with ad-free tiers getting the increase from October 12. Meanwhile, the ad-supported option will expand beyond the borders of the United States and will reach Canada and select markets in Europe starting from November 1.
Here are all the changes:
After Oct 12, 2023
Price in 2021
ESPN+ (with ads)
Disney+, Hulu, ESPN+ (with ads) bundle
Disney+ (ad-free), Hulu (ad-free), ESPN (with ads) bundle
Disney believes its content can compete with Netflix, the leader of the streaming world. Last year’s price increase saw minimal cancellations, pushing the company to hike the cost even more, Bob Iger said in the quarterly earnings call. The reason why the ad-supported tiers remained untouched is Disney encourages users to choose those.
Iger claimed that the “advertising landscape for streaming is healthier than linear TV”. Overall subscriber base dipped from 46.3 million to 46.0 million in the last quarter, but since the ad tier was introduced, 3.3 million subscribers went for that one; they were 40% of all new Disney+ subscribers in North America.
The streaming division lost $512 million in its fiscal quarter. The total amount of subscribers went up by 800,000, but the company excluded the Disney+ HotStar situation in India, it went from 52.9 million to 40.4 million after losing the rights to stream the cricket tournament Indian Premier League (IPL).
Iger also talked about the password-sharing issue, a strategy that helped Netflix generate millions of new subscribers. It will be addressed next calendar year, and the executive team is looking at the move as a strategic opportunity to help grow the business.
While the company saw less revenue than the expected amount ($22.3 billion), income from theme parks jumped 13%, especially after the Shanghai Disney Resort was finally open full-time after the lengthy COVID-19-related closures. The Disney CEO revealed he is “personally committed” to finding a solution to the ongoing strike of writers and actors in Hollywood, which is affecting the Pictures business of Disney.