Disney announces price hikes for Disney+ and Hulu ad-free plans to compensate for several box-office flops

08/21/2023 / By Richard Brown

Disney+ and Hulu will hike prices on their ad-free plans – part of Disney’s strategy to boost the profitability of its streaming business. Disney owns 67 percent of Hulu.

Starting October 12, Disney+ Premium will see a price hike from $11 to $14 per month, while Hulu without ads will jump from $15 to $17.99 per month. These price hikes represent an increase of 20-27 percent for both services’ standalone premium plans in the United States.

This will be the second price increase in Disney+ streaming service within a year. In December 2022, the subscription cost was raised as part of Disney’s effort to better align with the perceived value of its content offerings.

Disney CEO Bob Iger also mentioned that the company is considering a crackdown on password sharing, similar to what Netflix has implemented. He said the company is exploring account sharing for streaming and will provide additional details on its policy to curb it later this year.

“We already have the technical capability to monitor much of this,” Iger said. “I’m not going to give a specific number, except to say that it is significant.”

Disney looks for its streaming platforms to drive revenue and growth

These price hikes come at a time when Disney is navigating challenges in the film industry, as several of its major films in 2023 have underperformed at the box office. The company seems to be focusing more on its streaming platforms to drive revenue and growth. (Related: Disney is on the verge of financial collapse, leaked memo reveals.)

Disney’s streaming platforms, including Hulu and ESPN+, will undergo a significant pricing model change as well.

The ad-free plans for both Disney+ and Hulu will increase from $10.99 to $13.99 and from $14.99 to $17.99 per month, respectively.

The ad-supported tiers of both Disney+ and Hulu will remain at $8 per month each in the United States.

This new pricing model reflects Disney’s push towards encouraging consumers to opt for the ad-supported tiers, which generate revenue from advertising. The company’s new duo bundle, offering both Disney+ and Hulu’s ad-free plans at a discounted rate of $19.99 per month, aims to entice subscribers to opt for this combined package.

This move aligns with Disney’s strategy of bundling its streaming services, potentially increasing its revenue while offering customers a perceived value.

While streaming services’ price hikes have become a common trend, they raise questions about the affordability and value proposition of these platforms, especially as consumers juggle multiple subscription services.

The industry’s landscape is evolving rapidly, as streaming platforms continue to compete for market share, content, and ultimately, subscribers’ wallets.

Disney+ and Hulu are raking in revenues for Disney this year. Recent reports peg Disney’s total revenues at $1.27 billion in the first three months alone, an increase from the previous years.

Last year, Disney Plus increased its revenue by 42 percent, generating over $7 billion for the media conglomerate. On the other hand, Hulu’s total revenue earned in June 2022 was $530 million.

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