Disney has announced plans to increase the price of a Disney Plus subscription in the US later this year.
The move will coincide with the launch of the streamer’s new ad-supported subscription tier on December 8, which is expected to cost $7.99 a month (that is, the same as an existing Disney Plus subscription). Pricing for the ad-free version of the service will rise to $10.99 a month, or $109.99 a year — up from $79.99 — company bosses revealed during a recent earnings call (opens in new tab).
Customers in the UK and Australia appear safe from the increase for the time being, although we suspect that Disney’s planned ad-supported tier launch internationally in 2023 will result in equivalent price increases across all industries. We reached out to Disney for more details, who told us that the company “has nothing to share specific to international markets as of right now.”
It’s worth noting that US subscribers who prepaid for an annual Disney Plus subscription will not be affected by the price increase until their next payment date. That is, as long as it falls after December 8th.
Hulu and ESPN Plus are also getting more expensive for US customers. On October 10, the standard tier of the former will go from $12.99 a month to $14.99, while its ad-supported version will jump from $6.99 a month to $7.99. ESPN Plus will increase from $6.99 to $9.99 on August 23, while the Disney Bundle (which includes ad-free Disney Plus, ad-free Hulu, and ad-supported ESPN Plus subscriptions) will also increase to $19 .99 per month (up from $13.99).
Despite adding more than 14 million subscribers to Disney Plus in the third quarter of 2022 — bringing the streamer’s global total to a whopping 152 million — rising production and programming costs have resulted, according to company executives, in higher operating losses than in the past. previous quarters.
“We remain confident that Disney Plus will achieve profitability in fiscal 2024,” Disney CFO Christine McCarthy said during the recent earnings call — and the aforementioned price increases will help the media giant achieve that goal.
Disney Plus with Ads: What’s the Problem?
So Disney’s ad-supported tier is finally launching in the US on December 8 for $7.99 a month (won’t be available as an annual plan) – but what is it all about?
According to Disney, the new tier will provide consumers with greater financial choice and will have a “lower ad load and frequency to ensure a great experience for viewers.”
That claim was substantiated earlier this year when reports emerged suggesting that Disney’s ad-supported tier will limit commercials to four minutes per hour of content and restrict ads stopped when kids are watching via the kids’ platform user profiles. . Disney confirmed the latter on its recent earnings call.
For comparison, Disney’s other streaming service, Hulu, serves up to 12 minutes of ads per hour of content, while NBC’s Peacock serves five. Cable TV typically bombards viewers with about 20 minutes of ads per hour of content.
A limit of four minutes per hour would bring Disney’s ad-supported tier in line with that of HBO Max, which launched its own cheaper subscription package in June 2021.
Despite years of very public resistance to introducing advertising into its business model, Netflix recently admitted that it also intends to launch an ad-supported subscription tier in “early 2023”. However, some movies and TV shows don’t make the cut, at least to begin with.
It’s not yet clear what content parameters Disney plans to impose at its ad-supported level, but confirmation of some pretty hefty price increases across its streaming portfolio is sure to ruffle the feathers of increasingly frugal subscribers, particularly in a climate where the cost of living is biting hard in many regions.
Netflix has already seen a drop in its subscriber base as a result of rising food and fuel prices, so one has to wonder if Disney is prepared for its streamer to suffer a potentially similar fate.
For more Disney Plus related content, read What to Expect on Disney Plus Day, which takes place on September 8. Alternatively, find out how the latest Predator movie just set a new world record on Disney Plus and Hulu.