:max_bytes(150000):strip_icc()/GettyImages-2074398401-9024091010f345ee94572d41d7027e12.jpg?w=1024&resize=1024,1024&ssl=1 "Disney+, Hulu, and ESPN+ Will Cost More Starting in October")
Key Takeaways
- Disney is raising prices for Disney+, Hulu, and ESPN+ starting October 17, about 1 year after it last raised prices in the U.S.
- Disney will report fiscal third-quarter earnings Wednesday morning.
- Price hikes are one component of Disney’s efforts to make its streaming services profitable after years of spending aggressively to catch Netflix.
The Walt Disney Company’s (DIS) various streaming services will get more expensive starting in mid-October, the company said Tuesday.
The price of ad-supported and ad-free Disney+ will both increase by $2 to $9.99 and $15.99 a month, respectively. Hulu with ads will similarly jump to $9.99 from $7.99, while the ad-free version will go up to $18.99 from $14.99. ESPN+ with ads will cost $11.99 a month, up from $10.99. Disney last raised prices in the U.S. in October 2023.
The announcement comes a day before Disney is slated to release its fiscal 2024 third-quarter results before the opening bell on Wednesday. Shares rose 2.5% Tuesday.
Disney Under Pressure to Turn Streaming Profit
Disney, like competitors Warner Bros Discovery (WBD) and Paramount (PARA), has recently been under pressure to make its streaming endeavors profitable after spending huge sums to catch industry leader Netflix (NFLX).
Disney earlier this year took a page out of streaming leader Netflix’s playbook and vowed to crack down on password sharing in June.
Disney surprised Wall Street by nearly reaching profitability in its fiscal second quarter when a loss at ESPN+ slightly offset a small profit at Disney+ and Hulu. It attributed the improved results to higher prices, subscriber growth, and lower distribution costs. At the time, it forecast its streaming division would be profitable in the fourth quarter.
There’s Value in Bundling
Disney has lately nudged subscribers toward bundles by offering steep discounts, and that will still be true after the price hikes.
Case in point, Hulu with ads and Disney+ will increase $1 to $10.99 a month, just $1 more than ad-supported Disney+ alone. The ad-free version isn’t increasing in price at all, sticking at $19.99.
Streamers like bundling because it tends to reduce churn and lower subscriber acquisition costs. They have embraced the practice even though it means collaborating with competitors.
In July, Disney launched a partnership with Warner Bros. Discovery to bundle Disney+ and Hulu with Max for $16.99 a month with ads and $29.99 without. Like the Hulu/Disney+ ad-free bundle, October’s price hikes will not apply to this offering.
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