October 2, 2022

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Disney raises prices for streaming services

Disney raises prices for streaming services

Disney Unveiled a new pricing structure that includes ad-supported Disney+ as part of an effort to make the streaming business profitable.

Starting December 8 in the US, Disney+ with commercials will be priced at $7.99 per month – which is currently Disney+’s ad-free price. The ad-free Disney+ service will increase by 38% to $10.99 – an increase of $3 per month.

The price of Hulu without ads will increase by $2 per month, from $12.99 to $14.99, effective October 10. Hulu with ads will go up by $1 per month, going from $6.99 to $7.99.

Disney It announced last month that ESPN + With ads it will go up 43% to $9.99 per month.

The price increases reflect growing operating losses for Disney’s streaming services. Disney+, Hulu and ESPN+ collectively lost $1.1 billion in the third quarter of the fiscal year, $300 million more than analysts’ average estimate, reflecting the higher cost of content on the services. The increased operating loss occurred even as Disney added about 15 million new Disney+ subscribers in the quarter, about 5 million more than analysts’ estimates.

Disney previously stated that it plans to lose money on Disney+ Until 2024. CFO Kristen McCarthy reiterated on an earnings conference call on Wednesday that Disney+ losses will peak in Disney’s fiscal year 2022.

Disney+’s average revenue per user declined 5% in the quarter in the US and Canada due to more customers offering cheaper deals for multiple products.

Overall, the company’s quarterly results, which were announced on Wednesday, beat analysts’ expectations Up and down. Disney+ subscriptions rose to 152.1 million over the recent period, above Wall Street expectations of 147 million.

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Counting Disney+, ESPN+, and Hulu (partly owned by Comcast), Disney has 221 million live subscribers

Combined pricing

Disney also announced pricing for new bundles that include the Disney+ product with commercials.

For existing customers only, the no-ads Disney+, Hulu, and ESPN+ bundle with ads will increase by $1, from $13.99 to $14.99.

The package price for Disney+, Hulu, and ESPN+, all with ads, will be $12.99, or $1 less than the current Disney package price.

Consumers will be able to purchase the Disney+ and Hulu bundle for $9.99 per month with commercials. This is a discount for paying for Disney+ and Hulu with separate ads.

The price for Disney+ and no-ad Hulu ads, with ESPN+, remains $19.99 a month.

Disney will also get new pricing for Hulu with its live TV packages. Subscribers who want Hulu with live TV, Disney+, Hulu, and ESPN+ with commercials will pay $69.99 per month. For existing customers, Disney will offer Disney+ no commercials in that bundle for $74.99. Hulu’s premium bundle with live TV along with Disney+ and Hulu without ads will be $82.99 per month.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.