**Disney+ Raises Prices to Boost Profitability**
Walt Disney is implementing price increases for its streaming services, including a significant jump of 27% for the ad-free version of its flagship platform Disney+. This move reflects Disney’s strategy to make its streaming business profitable by September 2024. The price adjustment will take effect on October 12th, with the ad-free version of Disney+ costing $14 per month, up from the current $11. Additionally, the ad-free version of Hulu, another streaming service owned by Disney, will experience a 20% price increase to $18 per month. This marks the second price hike for Disney+ in less than a year.
**Disney’s Approach to Pricing**
Disney initially entered the streaming market in November 2019 by offering attractively low subscription prices for Disney+, aiming to quickly gather a large subscriber base. However, the company has now decided to raise prices to reduce losses and maintain competitiveness, while also avoiding customer alienation. Disney’s primary competitor, Netflix, charges $15.50 per month for its ad-free service, while Warner Bros. Discovery prices the Max service at $16.
**Improved Financial Performance**
In the fiscal third quarter, Disney reported a significant reduction in losses from streaming. The loss narrowed to $512 million, which is half of what was projected three months ago. During this period, Disney+ garnered an additional 105.7 million core customers, reaching a total of 105.7 million. The excluded count includes customers from the Hotstar service, which operates in Asia.
**Changes in Pricing and Bundles**
To accommodate the price adjustment, Disney has made changes to its bundled offerings. They introduced an ad-free version of the Disney-Hulu bundle, priced at $20 per month. Meanwhile, the subscription for the ad-free bundle consisting of Disney+, Hulu, and ESPN+ will increase to $25 per month from the previous $20 price point. Additionally, the bundled package with ads will rise to $15 per month from $13.
**Expansion Plans and Introduction of Ad-Supported Disney+**
Disney is preparing to launch an ad-supported version of Disney+ in select European markets and Canada in November. This expansion allows Disney to tap into new markets while providing consumers with more pricing options.