Disney+’s new ad-supported subscription tier will debut in the US on December 8 for $7.99 per month, the company announced Wednesday.If that price range looks familiar, it should. That’s what consumers are paying for Disney+ right now. without it of advertisement.
The Disney+ price hike is due to the service’s strong quarter. The service topped Wall Street’s expectations in the third quarter, when he recorded 14.4 million subscribers. Currently, the service has 152.1 million subscribers.
The result sent the stock up 5.5% in after-hours trading.
In terms of the company’s overall revenue, Disney (DIS) posted revenue of $21.5 billion in the second quarter, up 26% from last year, and net income of $1.4 billion, up 53% from the previous year.
Disney CEO Bob Chapek said: in the company’s letter to investors on Wednesday.
Disney+ is getting $$$
Disney+ isn’t the only Disney streaming service to see price increases.
Hulu, which is majority-owned by Disney, will also raise prices, with the ad-supported tier going from $1 to $7.99, and ad-free Hulu going from $2 to $14.99.
One of the plans that hasn’t been increased in price is Disney’s Premium Disney Bundle. It joins the company’s streaming services of Disney+ and Hulu ad-free along with ESPN+. The price remains at $19.99.
The move appears to be Disney’s way of encouraging consumers to sign up for all of their services, not just one. From a price point of view, at just $9 a month more than Disney’s biggest service, he can’t say no to a bundle that includes three services.
Integrating streaming services seems to be the new focus of media companies.
If the first phase of the streaming revolution that began around 2017 was the “Streaming Wars,” the next phase could be considered the “Bundling Frenzy.”
So why is your streaming pocketbook about to take another hit? Because building a successful streaming service is very expensive.
Across the industry, it’s getting harder to attract new subscribers, and when subscriber numbers are declining, you need to get your revenue from somewhere. Raising prices is one easy way to do that.
Disney can get away with these sorts of price increases given the breadth of its library.
Disney+ has some of the most popular brands in all entertainment, including Marvel Studios, Pixar, Disney Animation, and Star Wars. Hulu also has trending content, including 20th Century Studios feature films and FX shows.
Kareem Daniel, chairman of Disney Media & Entertainment Distribution, said in a statement Wednesday that, like the company’s new line of streaming plans, the new ad-supported service will “provide more consumer choice at different price points, We will meet the diverse needs of our audience and appeal to an even wider audience.”
Source: www.cnn.com
