Disney+, Hulu, and ESPN+ Subscription Prices to Increase Starting October
Starting mid-October, Disney's streaming platforms—Disney+, Hulu, and ESPN+—will see a price increase as part of the company's strategy to enhance profitability.
Important Highlights
- Beginning October 17, Disney will raise subscription fees for Disney+, Hulu, and ESPN+, marking about a year since the last U.S. price adjustment.
- Disney is scheduled to announce its fiscal third-quarter earnings on Wednesday morning.
- The price increases are aligned with Disney's ongoing efforts to achieve profitability in its streaming services after years of significant investment to compete with Netflix.
The Walt Disney Company (DIS) revealed on Tuesday that its streaming services will experience price hikes starting mid-October.
Both ad-supported and ad-free Disney+ plans will increase by $2, reaching $9.99 and $15.99 per month, respectively. Hulu’s ad-supported subscription will rise from $7.99 to $9.99, while the ad-free tier will increase from $14.99 to $18.99. ESPN+ with ads will cost $11.99 monthly, up from $10.99. The last price update in the U.S. was in October 2023.
This announcement precedes Disney's fiscal 2024 third-quarter earnings report, set for release before the market opens on Wednesday. Following the news, Disney’s shares climbed by 2.5% on Tuesday.
Disney’s Drive Toward Streaming Profitability
Similar to competitors Warner Bros Discovery (WBD) and Paramount (PARA), Disney is under increasing pressure to turn its streaming platforms profitable after investing heavily to compete with industry leader Netflix (NFLX).
Earlier this year, Disney adopted strategies similar to Netflix by initiating stricter measures against password sharing starting June.
In its fiscal second quarter, Disney nearly achieved profitability in streaming, with ESPN+ losses offset by modest profits from Disney+ and Hulu. The company credited this progress to higher subscription prices, subscriber growth, and reduced distribution expenses. Disney projects its streaming segment to be profitable by the fourth quarter.
Bundling Offers Continued Value
Disney continues to encourage subscribers to opt for bundled packages by providing attractive discounts, a strategy that remains despite the upcoming price increases.
For example, the combined Hulu with ads and Disney+ bundle will increase by only $1 to $10.99 per month, just slightly above the standalone ad-supported Disney+ price. Notably, the ad-free bundle price remains steady at $19.99.
Bundling is favored by streaming services as it helps reduce subscriber churn and lowers acquisition costs, even if it requires collaboration with competitors.
In July, Disney partnered with Warner Bros. Discovery to offer a bundle of Disney+, Hulu, and Max for $16.99 monthly with ads and $29.99 without ads. This bundle, like the Hulu/Disney+ ad-free package, will not be affected by the October price increases.
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