Disney Plans Price Hike On Streaming Services

Disney CEO Bob Iger has said that the company would increase prices for its ad-free Disney+ and Hulu plans in October and tighten down on password sharing to make a profit on its streaming services.

Disney+ without ads will now cost over $14 per month, a 27 percent increase, while Hulu without ads will cost nearly $18 per month, a 3 percent rise, making it more costly than the most popular ad-free tier at Netflix.

While the company’s sales increased by 4%, the net loss was $460 million, compared to a profit of $1.4 billion in the same period a year before. After-hours trading saw Disney stock rise 2.2% to $89.45 from its previous closing of $87.49.

While Disney’s quarterly losses on Disney+ narrowed, the service continued to see a decline in domestic customers in both the United States and Canada. Third consecutive quarterly decreases were seen internationally, with problems in the Indian market being a significant contributor. Third-quarter foreign subscribers were 146.1 million, down 7.4 percent from the previous quarter’s 157.8 million. It lost another 300,000 domestic users in the third quarter, matching its loss of the prior quarter.

Iger said that the price increases are aimed at encouraging customers to switch to the ad-supported free tiers of the services rather than paying the unchanged subscription fees. The streaming advertising industry is “picking up,” Disney hopes to take advantage of this growth by shifting more customers to its ad-supported plan.

Critics question if Disney’s new pricing and enforcement policies will be enough to restore the company to sustainable growth.

Disney is now in the midst of a planned restructuring that will save the corporation $5.5 billion over the next few years by eliminating around 7,000 employees. Iger has been instrumental in stabilizing Disney’s theme park revenue and turning around the company’s streaming division. He has made it a top priority to reach out to longtime Disney theme park visitors and win back their trust.

Iger has agreed to stay on as CEO of The Walt Disney Co. until the end of 2026, as announced by Disney last month, giving the media conglomerate more time to choose his replacement.