Disney+ Ad-Free Experience to See Monthly Price Increase to $13.99

By Telita Montales , Parent Herald Aug 10, 06:01 am

Disney has announced price hikes for its various streaming services, aiming to enhance the profitability of its streaming business. Among the changes, the ad-free version of Disney+ will see a substantial increase of 27% to $13.99 per month, effective October 12.

Meanwhile, the ad-supported Disney+ subscription will maintain its current price of $7.99 per month. Additionally, Disney plans to expand its ad-supported offering to specific markets in Europe and Canada starting November 1.

Hulu Subscribers to Feel the Pinch as Disney Implements Significant Price Adjustments

Notably, Hulu, a popular streaming platform under Disney's umbrella, is also experiencing price adjustments. The ad-free subscription for Hulu will undergo a 20% increase to $17.99 per month, while the ad-supported option will remain priced at $7.99 per month. In comparison, Netflix's standard plan, which offers an ad-free experience, costs $15.49 per month. Similarly, Warner Bros. Discovery's Max subscription is priced at $15.99 per month.

According to NBC News, this move by Disney to elevate the price of Disney+ to almost match the costs of commercial-free Netflix and Max, as well as increase Hulu's price point, indicates the company's confidence in the competitive strength of its content library. When Disney+ was launched in 2019 by then-CEO Bob Iger, it was deliberately positioned as a family-oriented offering at a comparatively low price of $6.99 per month, almost half the price of Netflix.

Interestingly, Disney raised the price of Disney+ by $3 per month last year. Surprisingly, this increase had minimal impact on cancellations, according to Bob Iger during a quarterly earnings conference call in May. He stated, "We were pleasantly surprised that the loss of subscribers, due to what was a substantial increase in pricing for the non-ad-supported Disney+ product, was de minimis." This observation led Disney to believe that their streaming services had pricing elasticity, giving them room for further price adjustments.

However, these price adjustments are happening amidst challenges in the entertainment industry, such as the ongoing Hollywood writers and actors strikes that could potentially disrupt content production. Despite these potential hurdles, Disney seems confident that consumers will continue to value their streaming services and be willing to pay the increased prices.

Diverse Bundles Offered: Disney Paves the Way for Hybrid Streaming Subscriptions

Disney is introducing a new "premium duo" offering for consumers who want both Disney+ and ad-free Hulu, priced at $19.99 per month, offering a $12 per month savings compared to subscribing to the services separately. The bundle of Disney+ and Hulu with ads will maintain its $9.99 per month pricing.

Furthermore, the bundle that includes Disney+ (no ads), Hulu (no ads), and ESPN+ (with ads) will be priced at $24.99 per month, up from $19.99 per month. Meanwhile, the bundle, which includes all three services with commercials, will increase by $2 per month to $14.99 per month.

Disney's streaming division reported a loss of $512 million in the fiscal third quarter. During this period, Disney+ (excluding India's Hotstar) gained 800,000 subscribers, bringing the total Disney+ subscriber count to 105.7 million. With Hotstar included, Disney+ boasts approximately 146 million subscribers in total.

In a related note, the price of Hulu + Live TV with ads will rise to $76.99 from $69.99 per month, and the commercial-free version of Hulu + Live TV will cost $89.99 per month, up from $82.99 per month. These changes in pricing reflect Disney's strategic efforts to enhance the financial performance of its streaming services amid a dynamic and competitive streaming landscape.