New York (CNN Business)Disney+ prices increased. Unless you are willing to watch ads.
Disney+'s new ad-supported subscription level 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. This is what consumers are currently paying for Disney+ ad-free.
The Disney+ price increase was due to a strong quarter for the service. The service hit 14.4 million subscribers in the third quarter, beating Wall Street's expectations. Currently, the service has 152.1 million subscribers.
This result boosted the stock by as much as 6.5% in after-hours trading.
In terms of company-wide earnings, Disney (DIS) posted revenue of $21.5 billion in the second quarter, up 26% from last year, and net income at his $1.4 billion. , an increase of 53% from the previous year. one year ago.
Disney says he has 221 million subscribers across multiple streaming services. Netflix has 220.6 million.
Disney also revised its long-term projections from 230 million to 260 million subscribers by the end of fiscal year 2024. On Wednesday, Core's provided new guidance for Disney+'s subscriber count to grow from 135 million to 165 million. Disney+ Hotstar service in India is worth $80 million.
"We had a great quarter, with our world-class creative and business teams delivering outstanding performances at our national theme parks and significantly increasing our live sports viewership. , the streaming service has seen a significant increase in subscribers," Bob Disney CEO Chapek said in the company's letter to investors on Wednesday.
Why Disney+ Prices Are Rising
Disney+ isn't the only place with rising prices.
Hulu, which is majority-owned by Disney, will also raise prices, from $1 to $7.99 for ad-supported tiers, and from $2 to $14.99 for ad-free Hulu.
One plan that has not been increased is the 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 his services, not just one. From a pricing standpoint, you can't say no to a bundle that includes three services for just $9 more per month than Disney's biggest offering.
Integrating streaming services appears to be the new focus of media companies.
If the first stage of the streaming revolution, which began around 2017, was the "streaming wars," the next stage could be considered the "bundling turmoil."
So why is your streaming pocketbook about to take another hit? Because building a successful streaming service is very expensive.
Services like Disney+ spend millions, if not billions, to not only create fresh content that appeals to new and old subscribers, but also to It also requires expensive infrastructure to keep everything together. Exhibit A: Disney's D2C division lost $1.06 billion in Q3, about four times what it did a year ago.
Across the industry, when it becomes harder to attract new subscribers and subscriber numbers are declining, revenue has to come from somewhere. Raising prices is one easy way to do that.
And Disney, given the breadth of its library, can get away with this sort of price hike. Here are some of the most popular brands in all entertainment. Hulu also has trending content, including 20th Century Studios feature films and FX shows.
Disney Media & Entertainment Distribution chairman Kareem Daniel said in a statement Wednesday that the new ad-supported service and the company's new line of streaming plans "will give consumers more choice. will do," he said. We offer a variety of price points to meet the diverse needs of our audience and appeal to a wider audience.
More than Just Streaming
Disney's strong third quarter wasn't just because of Disney+.
The company's Parks, Experiences and Products division had a very strong quarter, with revenue of $7.3 billion, up 70% year over year.
Disney said this was a result of "increased attendance, room occupancy and cruise ship departures."
"While our domestic parks and resorts remained open throughout the quarter, Disneyland Resort was open for 65 days in the same period last year, and Walt Disney World Resort We were operating with reduced production,” the company said.
