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Disney is "not concerned" about blowback from higher prices, per CEO. Yesterday, The Walt Disney company announced it will soon raise prices for Disney+, Hulu, and ESPN+. Today, it revealed that its streaming business has become profitable for the first time. So if Disney is starting to make money, why has it decided to jack up prices ...again? Disney says it has “earned” higher prices On October 17, pricing for ad and ad-free subscriptions to Disney+, Hulu, and ESPN+ will increase by as much as 25 percent, depending on the plan (you can see a breakdown of pricing changes here). The pending price hikes follow price increases for the platforms issued in October 2023 and August 2022. During Disney's Q3 2024 earnings call today, CFO Hugh Johnston (per a Motley Fool-provided transcription) said that Disney's earned the right to charge more for streaming services, pointing to current and upcoming content availability: CEO Bob Iger said that Disney has increased its streaming "pricing leverage" with upcoming features like new live channels and movies. As Disney, like other streaming businesses, looks to shift focus from growing subscriber counts to other factors, like user engagement—or how much time users spend on the service, which can help companies' ad businesses—and profit margins, it may be more emboldened to make moves that could potentially cost it some subscribers (more on this in a moment). When asked about customer pushback on the latest price hikes, Iger said in part: Disney says it hasn’t lost many customers from previous price hikes Although price hikes across streaming platforms have driven subscribers to the web to declare cancellation plans and encourage others to cancel, Iger claimed that “every time we've taken a price increase, we've had only modest churn from that, nothing that we would consider significant.” One of the biggest business challenges facing streaming companies currently is high churn rates. But it seems like other reasons for fast churning—such as subscribers watching preferred content and then canceling until the platform adds new, desirable stuff to watch—may be more pressing to Disney than frequent price hikes—which have become common among streaming services. Iger also claimed that Disney hadn't seen a significant backlash to the password-sharing crackdown that the company began rolling out earlier this year and will continue "in earnest" in September. Need for profits Of course, the need for profitability is also driving up prices. Like any business, Disney is eyeing long-term profitability in streaming. After increasing the cost of its services for years, the fiscal quarter ending on June 29 is the first time Disney's streaming business made money. Its streaming business made $47 million in operating income in Q3 (from $6.38 billion in revenue), compared to Q3 2023, when it lost $512 million. Disney isn't satisfied with this streaming profitability and has been promising investors that its streaming business will quickly reach double-digit margins. More broadly speaking, Disney is also challenged to maintain success amid a declining TV industry and pressure on other, older aspects of its business, like theme parks. As noted, Disney is banking on customers thinking that its streaming content is worth the price. It has seen challenges, though, including losing about $1 billion in big-budget releases last year. Meanwhile, Disney's overall budget for content decreased from $27 billion in 2023 to $25 billion in 2024. Contrastingly, Disney's biggest streaming rival, Netflix, grew its content spending by 35 percent from 2023 to 2024 to $17 billion, per Fortune. The battle for content, especially ad-friendly live content like sporting events, is heating up as indicated by Disney paying a reported $2.6 billion per year on average for rights to stream NBA games over the next 11 years, per The New York Times. That's up from the $1.5 billion/year it was paying under the current contract. During Disney's earnings call, Iger noted that the company leans more on original films than original TV series, saying, "That blend of spending between films and series, we believe, gives us an opportunity to increase our margins and grow the business." The company also said that licensing won't be a big part of its strategy, putting extra pressure on Disney's ability to make original content that appeals to streamers and that it can monetize. Leaning on bundles We often see streaming services increase pricing for plans that don’t include commercials. This is because streaming platforms generally make more revenue on average from users who subscribe to ad tiers. However, Disney’s new price hikes extend to both ad-free and ad-tier plans. Notably, the only plans that aren't getting price bumps in October are Disney's ad and ad-free plans combining Disney+, Hulu, and ESPN+. This shows the weight companies are putting behind streaming bundles. Streaming companies believe that bundling one streaming service with another—or other services, like mobile phone plans—will reduce high cancellation rates. Disney's Johnston said that bundling "has had a positive impact on churn" and that bundles, along with the password crackdown, will help grow Disney's streaming business. As companies like Disney continue setting lofty goals around profits, customer engagement, and ad sales while carrying limitations around content licensing and content budgets, price hikes will continue being an obvious way for platforms like Disney+ and Hulu to try to meet business expectations in the competitive streaming market. Source Hope you enjoyed this news post. Thank you for appreciating my time and effort posting news every single day for many years. 2023: Over 5,800 news posts | 2024 (till end of July): 3,313 news posts

Get ready for even more price increases for major streaming services. Today, Disney announced it will increase the individual prices for its Disney+, Hulu, and ESPN+ services on October 17. The price increase will come just one year after a similar hike in October 2023. Variety has the low down on what's going up and by how much for people in the US: Not everything is getting a price increase. The bundle plan with Disney+ and Hulu with ads will stay at $10.99 a month, while the Disney+ and Hulu bundle plan without ads will stay at $19.99 a month. There will be a few extra features coming to Disney+ users in the near future. Starting on September 4, users will be able to access a 24/7 stream of the ABC News Live channel. They will also be able to access a preschool content playlist. Sometime later in the fall, four more playlists will be added for Disney+ Premium subscribers: Seasonal Content, Throwbacks, Real Life, and Epic Stories. In late July, another bundle deal that combines Disney+ and Hulu with Warner Bros Discovery's Max service launched. It costs $16.99 a month for the ad-plans bundle and $29.99 a month for the bundle without ads. Both offer at least 35 percent off the normal cost compared to buying each service on its own. Source Hope you enjoyed this news post. Thank you for appreciating my time and effort posting news every single day for many years. 2023: Over 5,800 news posts | 2024 (till end of July): 3,313 news posts

Disney Plus added 12.1 million subscribers globally in Q4. Disney Plus added over 9 million subscribers in the US in the last several months, and many people in the US are opting for its bundle that includes Disney Plus, Hulu, and ESPN Plus. In its earnings report on Tuesday, Disney also revealed that it added 12.1 million Disney Plus subscribers globally, making for 164 million in total, as well as 14.6 million subscribers across all its services. Christine McCarthy, the chief financial officer at Disney, said during an earnings call that 40 percent of Disney Plus subscribers have the bundle with Hulu and ESPN Plus, which its pricing makes it increasingly hard to pass up. It provides access to all services for $14.99 per month for the ad-supported versions of Disney Plus, Hulu, and ESPN Plus or $19.99 per month for Disney Plus and Hulu without ads (and ESPN Plus with ads). The bundle price looks better after recent price hikes that brought the ad-free Disney Plus from $7.99 to $10.99 and ad-free Hulu from $12.99 to $14.99 (or $6.99 to $7.99 for the ad-supported version). It also implemented a price increase on its ESPN Plus subscriptions in July, which now costs $9.99 instead of $6.99. Even with these price increases, Disney’s average monthly revenue per paid subscriber for Disney Plus in the US and Hulu without live TV actually decreased from $6.81 to $6.10 and $12.75 to $12.23, respectively. This is likely because more people bought into the bundle, as it reduces how much they’re paying for each individual subscription. Although all of Disney’s services are adding subscribers, the company lost $1.5 billion in direct-to-consumer revenue. The company attributes this to a lack of Premier Access releases, which let subscribers watch cinematic releases directly from Disney Plus. It also says it dealt with an “increase in programming and production costs” as the company added more content to the service. Disney remains pretty optimistic that its streaming services will continue to grow. On December 8th, Disney Plus is introducing its new, cheaper ad-supported tier for $7.99 per month that CEO Bob Chapek says the company has “secured more than 100 advertisers” for so far. 40 percent of US Disney Plus subscribers picked the bundle with ESPN Plus and Hulu

If you live in the US and subscribe to the Disney+ streaming service, you know that you can now access all of the content from the Hulu service inside the Disney+ app if you are also a Hulu subscriber, or bundle it with Disney+. Today, it was revealed that Disney+ US users will soon be able to do the same thing if they have an ESPN+ subscription. In its latest quarterly financial results, Disney announced that the ESPN+ title will be added to the Disney+ app in the US sometime in late 2024. Disney says that those users will be able to stream "select live game and studio programming" from ESPN+. There's no word yet on the specific content that will be available in the Disney+ app. Disney has already announced it plans to team up with Fox, and Warner Bros. Discovery to launch a new sports-themed streaming service in late 2024. The currently unnamed service will combine all of the content shown on ESPN, Fox Sports, and TNT Networks. Disney also plans to launch a stand-alone ESPN streaming service with all of the content from its cable networks in late 2025. In today's financial presentation for Disney's fiscal second quarter of 2024, the company revealed it added almost 8 million more Disney+ subscribers in the US and Canada. It now has a worldwide total of 117.6 million subscribers. Earlier this year, Disney announced that it would begin cracking down on people who share passwords on its streaming services. The company says it will slowly begin in June and will be fully in place in September. Disney has yet to announce how it plans to handle those password sharers. It may put in new fees for those users like Netflix has done, or it might try another method to discourage them. Source

The price is jumping from $6.99 to $9.99 per month ESPN is raising the price of its standalone ESPN Plus streaming service from $6.99 per month to $9.99 per month, a nearly 43 percent increase, beginning August 23rd, as reported earlier by Sports Business Journal. The price of the annual plan is also going up from $69.99 to $99.99. If you get your streaming ESPN service as a part of the Disney bundle, however, which packages Disney Plus, ESPN Plus, and ad-supported Hulu for $13.99 per month (including Hulu without ads takes the price to $19.99 per month), that will remain at the same price as before. The service’s website and support pages haven’t been updated to reflect the increase yet, but a statement sent over by Disney spokesperson Paul Melvin indicates subscribers will be notified next week. The price change reflects how even as moving between services and packages becomes more flexible as we move beyond the traditional cable bundle, access isn’t as cheap as it once seemed. ESPN Plus already raised its price (twice) last year, and now there’s an even steeper increase. ESPN points out that content deals it signs increasingly include ESPN Plus components along with the access to editorial content on its website that subscribers get. Still, if your dream is unfettered access to standalone sports streaming, then it’s both closer than it has ever been and also much further away as Disney’s pricing encourages taking the bundle — even if that’s not what you really want. ESPN Plus is about to get even more expensive