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In a shift that may not feel so magical, Disney+ is altering its pricing structure due to substantial operating losses within the streaming service. Inflation is impacting everyone, including the realms of Mickey Mouse and Moana, leading to changes that will either lighten your wallet or modify your viewing experience. Beginning December 8 in the U.S., the monthly subscription fee for Disney+ will jump by 38%, rising from $7.99 to $10.99. However, there’s a silver lining: the service will introduce an ad-supported subscription tier at the original price of $7.99.
Disney+ CEO Bob Johnson revealed this ad-based option during a recent earnings call, stating, “Providing various subscription choices is beneficial for both consumers and advertisers.” Rita Smith, Disney’s head of advertising, noted that there’s significant interest from advertisers eager to participate in Disney+, driven by a rising demand for streaming content.
While it remains unclear how many toy commercials will air before your kids can dive into their favorite Star Wars episodes, the price increases will also affect other Disney streaming platforms. Starting October 10, Hulu’s ad-free service will increase by $2, from $12.99 to $14.99, while the ad-supported version will see a $1 hike, reaching $7.99. Additionally, ESPN+ will rise from $6.99 to $9.99 by the end of August.
A potential workaround for these price changes is the Disney ad-supported bundle, which includes Disney+, Hulu, and ESPN+ for $13.99. If you’re already subscribed to two of these services, this bundle could offer substantial savings — reminiscent of traditional cable packages. The bundle without ads remains unchanged at $19.99.
Despite rising operational costs, Disney+ continues to thrive in terms of subscriber numbers, boasting 152.1 million subscribers last quarter, surpassing expectations. Nevertheless, the company has indicated it will continue to incur losses on Disney+ until 2024, after which it anticipates a more robust subscriber base and international growth, leading to profitability. Ultimately, the business side might not matter much as long as kids can binge-watch Gravity Falls for the umpteenth time, allowing for some peace during your Zoom meetings.
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Summary:
Disney+ is raising subscription prices while introducing an ad-supported tier to offset losses. Starting December 8, the monthly fee will increase to $10.99, with an ad-supported option remaining at $7.99. Other Disney services like Hulu and ESPN+ will also see price hikes. Despite these changes, Disney+ has experienced growth in subscribers, with plans to achieve profitability by 2024.