A Disney Plus price hike was announced Wednesday as the Walt Disney Company reported third-quarter earnings.
Starting Oct. 12, an ad-free Disney Plus plan will cost $13.99 per month, up from $10.99, according to CNBC. Disney Plus with ads will stay at its current price of $7.99. The cost of Hulu without ads will also be going up, to a whopping $17.99 per month. Hulu with ads will also remain at $7.99.
CEO Bob Iger precipitated this move in Disney’s Q2 earnings call in May. He said then that the company planned to increase the price of its ad-free plan to create a wider "delta" between that and the price of its Disney Plus with ads service.
Iger also in May pointed to a combined Hulu and Disney Plus option; we learned this week that there will be an ad-free bundled subscription plan for both Disney Plus and Hulu for $19.99 per month, according to Variety.
The decision to hike Disney Plus prices again comes after previous price changes failed to dampen subscriber appetites. Iger said in May, “We plan to set a higher price for our ad-free tier later this year to better reflect the value of our content offerings.”
And Iger does not anticipate losing too many subscribers with this upcoming price increase. He said on the Wednesday earnings call, "We took a pretty significant price increase at Disney Plus sometime late in calendar '22, and we really didn’t see significant churn or loss of subs because of that, which was actually heartening."
Disney Plus struggled this quarter in India, where Disney lost the rights to Indian Premier League cricket matches, the New York Times reported. Overall, Disney Plus lost about 11.7 million subscribers worldwide during the quarter. Disney is still losing money on streaming.
"Our streaming business is still actually very young," Iger said Wednesday. "In fact it's not even 4 years old; it launched in November of 2019. We'd love to have the margins that Netflix has. They've accomplished those margins, though, over a substantially longer period of time, and they've done so because they figured out how to really carefully balance their investment in programming with their pricing strategy and what they spend in marketing."
"Because we're new at all of this, he continued, "we actually have not really achieved the balance we know we need to achieve in terms of cost savings, pricing, and money spent on marketing, and of course all the other things that we're looking at from a technological perspective that grows engagement with our customers."
Disney already increased the price of Disney Plus and Hulu subscriptions separately after introducing the ad-supported tier. This tier competes with other streaming giants' ad-supported options from Paramount Plus to Pluto TV and, Netflix's recent move into the field.
The move to combine more content under one app service is not new. Disney is following in the slipstream of Warner Bros. Discovery, who just announced the launch of its new app, Max, which combines the content libraries of HBO Max and Discovery Plus into one and is set to launch this month.
This may not be the end to changes for Disney Plus subscribers. Iger hinted on Wednesday that Disney Plus could be the next streamer to institute password-sharing policies, like Netflix. He said they are "actively exploring ways to address account sharing," according to The Verge.
Vaishali graduated in journalism from Leeds University, UK. She has worked for her local news outlet, the Leicester Mercury as well as writing personal finance stories for digital publications, The Money Edit, MoneyWeek and GoodToKnow. When she is not writing about money-saving, deals, finance hacks and other personal finance topics, Vaishali likes to travel and she's a foodie.
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