Wednesday, October 5, 2022

Disney hikes streaming pricing following a significant operational loss for its services.

Disney unveiled a new pricing structure that incorporates an advertising-supported Disney+ as part of an effort to make its streaming business profitable.

Disney+ with advertisements will cost $7.99 per month in the United States beginning December 8 – the same price as Disney+ without ads. The cost of ad-free Disney+ will climb 38% to $10.99 per month, a $3 increase.

Hulu without advertising will cost $2 more each month, from $12.99 to $14.99, beginning October 10. Hulu with commercials will increase by $1 per month, from $6.99 to $7.99.

Last month, Disney stated that ESPN+ with advertisements will increase by 43% to $9.99 per month.

The pricing increases reflect Disney’s streaming services’ rising operational deficit. The total loss of Disney+, Hulu, and ESPN+ in the fiscal third quarter was $1.1 billion, $300 million more than the average analyst expectation, indicating the greater cost of content on the services. The greater operational loss happened despite Disney adding over 15 million new Disney+ customers in the quarter, or 5 million more than experts predicted.

Disney has already said that it expects Disney+ to lose money until 2024. On Wednesday’s earnings call, Chief Financial Officer Christine McCarthy maintained that Disney+ losses likely peak during the company’s fiscal 2022.

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The average revenue per user for Disney+ in the United States and Canada fell by 5% in the third quarter as more consumers chose cheaper multiproduct solutions.

Overall, the company’s quarterly earnings, which were also released on Wednesday, exceeded analysts’ forecasts on both the top and bottom lines. Disney+ subscribers increased to 152.1 million in the most recent period, above Wall Street’s forecast of 147 million.

Disney has 221 million streaming users, including Disney+, ESPN+, and Hulu (which is partially owned by Comcast).

Disney also revealed new package rates for its Disney+ subscription, which includes advertisements.

A combination of Disney+ without commercials plus Hulu and ESPN+ with advertisements will rise by $1 for existing users alone, from $13.99 to $14.99.

A Disney+, Hulu, and ESPN+ package with advertisements will cost $12.99, which is $1 less than the current Disney bundle pricing.

Customers will be able to purchase a Disney+ and Hulu bundle with advertising for $9.99 per month. That is a savings over paying for Disney+ and Hulu with commercials individually.

The cost of a no-ad Disney+ and no-ad Hulu subscription with ESPN+ remains $19.99 per month.

Disney will also introduce new Hulu with live TV bundle price. Hulu with live TV and Disney+, Hulu, and ESPN+ with advertisements will cost $69.99 per month. Disney will provide Disney+ without advertising in that bundle for $74.99 for existing subscribers. The premium Hulu with live TV, Disney+, and Hulu without commercials package will cost $82.99 per month. is a participant in the Amazon Associates Program. Some links may be affiliate links. We may get paid if you buy something or take an action after clicking one of these.

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