Why Disney Is Increasing Their Streaming Prices
As Disney continues its push towards streaming profitability, the company has raised the price of several of its streaming offerings, including the ad-free versions of Diseny+ and Hulu.
Originally announced in August, the price hikes went into effect on October 12.
The ad-free version of Hulu now costs $18 per month, up from $15 per month. Ad-fee Disney+ meanwhile has seen its price increase from $11 per month (or $110 a year) to $14 per month (or $140 a year).
Disney Bundle Price Increases
The Disney bundles also saw two of its five packages get a price increase. The Trio Basic bundle, which includes ESPN+, and ad-supported versions of Disney+ and Hulu now costs $15 per month, up from $13 per.
The Trio Premium bundle, meanwhile, which includes ad-free versions of Hulu and Diseny+ along with ESPN+ saw an increase from $20 to $25 per month.
Disney Is Trying to Change Consumer Habits
Interestingly, the price for ad-based versions of Disney+ and Hulu did not increase. The reason for this is simple. By increasing prices, Diseny’s primary goal isn’t to make more money from ad-free subscribers, it is to drive those subscribers to ad-based versions of the app.
At the dawn of the streaming era, companies like Disney hoped that ad-free streaming services could eventually be profitable. What the company has realized as it loses billions of dollars in streaming, is that streaming needs advertising to make money.
Disney’s Hulu + Live streaming service, for example, is able to bring in a $91.80 ARPU (average revenue per user). Due to how lucrative advertising is on the streaming service, the monthly fees that users pay Disney are essentially pure profit.
After years of bleeding money in streaming, Disney believes that it has a path toward profitability. That path, however, requires users to switch to the ad-based versions of the streaming apps.
While the additional profit from ad-free subscribers is a bonus, Disney’s real goal is to drive its consumers to ad-based Disney+ and Hulu.