Disney has said it's planning to increase the price of Disney Plus subscriptions for U.S. customers later this year.
The price hike comes as the streamer is set to launch a new, ad-supported subscription tier in December that will cost $7.99 per month, which is the price of an existing Disney Plus subscription. For those who still want full, ad-free access to Disney's streaming offerings, they'll have to pay an increased fee of $10.99 per month or $109.99 per year, up from the current $79.99 that it costs annually now.
While U.K. viewers appear to be safe from the rising costs for now, it's probably not forever, as Disney has plans to introduce its ad-free subscription tier internationally sometime next year. We imagine that will result in similar price hikes.
Disney also offers additional streaming services, Hulu and ESPN Plus and both of those will also become more expensive to U.S. viewers. In October, the price of Hulu will jump from $12.99 per month to $14.99, with the ad-supported version rising from $6.99 to $7.99 a month. Meanwhile, ESPN Plus will rise from $6.99 to $9.99 much sooner, on August 23 in fact. As for the Disney Bundle, which comprises ad-free Disney Plus, ad-free Hulu and ad-supported ESPN Plus, this will rise from $13.99 a month to $19.99.
The price increases come at a time when Disney's streaming offerings are growing fast. In its most recent earnings call last week, executives said Disney Plus added 14 million new subscribers in the third quarter, bringing its global total to 152 million. However, rising production costs resulted in a higher operating loss for the company despite that growth.
Disney Chief Executive Christine McCarthy told investors "we remain confident that Disney Plus will achieve profitability in fiscal 2024", thanks in part to the planned price hikes.
Disney has explained that it's launching an ad-supported version of Disney Plus to give consumers "greater financial choice" and has promised it will have a "lower ad load" with adverts popping up less frequently than other services. While the company hasn't confirmed this, reports elsewhere suggest Disney's ad-supported tier will cap commercials at just four minutes for each hour of content watched. Moreover, ads will be blocked completely when children are watching via a kid-friendly user profile.
That's certainly a lot less than Hulu, which delivers up to 12 minutes of ads per hour of content, and less than Peacock, which runs at five minutes of ads. Cable TV, in contrast, typically overwhelms viewers with around 20 minutes of ads per hour.
HBO Max also runs at just four minutes of ads per hour of content shown.
Disney clearly thinks it will be able to get away with showing this amount of ads as its biggest rival, Netflix, has also decided to launch an ad-supported tier, having previously resisted doing so. Netflix will launch its cheaper tier in early 2023, though subscribers of that tier may not get access to its full catalogue of content.
