Disney+ Follows Netflix With Price Increases, Announces Launch Date For Ad-Supported Plan

Media company Walt Disney Co DIS announced third-quarter financial results after market close Wednesday. The company also announced a release date and pricing plans for its Disney+ ad-supported plan.

What Happened: Disney announced its highly anticipated ad-supported Disney+ streaming platform will launch in the U.S. on Dec. 8, 2022.

“With our new ad-supported Disney+ offering and an expanded lineup of plans across our entire streaming portfolio, we will be providing greater consumer choice at a variety of price points to cater to the diverse needs of our viewers and appeal to an even broader audience,” Disney Media & Entertainment Chairman Kareem Daniel said.

Here is a look at the new pricing levels for Disney+ and other Disney streaming packages:

• Disney+ (with ads): $7.99 a month
• Disney+ (no ads): $10.99 a month, $109.99 annual option
• Hulu (with ads): $7.99 a month, $79.99 annual option
• Hulu Premium (no ads): $14.99 a month
• ESPN+ (with ads): $9.99 a month, $99.99 annual option

The Hulu prices will kick in on Oct. 10, 2022.

The company also announced the pricing of $74.99 for UFC pay-per-view events with a UFC PPV+ plan having an annual cost of $124.98. UFC is owned by Endeavor Group Holdings Inc EDR. The UFC prices take effect Aug. 23, 2022.

Disney offers bundle options for its streaming platforms as follows:

• Disney+, Hulu (both with ads): $9.99 a month
• Disney+, Hulu, ESPN+ (all with ads): $12.99 a month
• Disney+ (no ads), Hulu (with ads), ESPN+ (with ads): $14.99 a month (legacy plan for existing subscribers)
• Disney+ (no ads), Hulu (no ads), ESPN+ (with ads): $19.99 a month

Hulu with Live TV is also offered at $69.99 a month as a bundle with Disney+ (with ads) and ESPN+ (with ads). A legacy plan for existing subscriptions for Disney+ (no ads), Hulu (with ads) and ESPN+ (with ads) is offered at $74.99 a month. A premium plan of Disney+ (no ads), Hulu (no ads), ESPN+ (with ads) is available for $82.99 a month.

Daniel said that Disney has more than 100,000 movies, TV episodes and live events across Disney+, Hulu and ESPN+ combined.

Related Link: Disney Q3 Earnings Highlights: Revenue And EPS Beat, 152.1 Million Disney+ Subscribers And More 

Why It’s Important: Disney announced Wednesday that it added 14.4 million subscribers for Disney+ in the third quarter. The company ended the quarter with 44.5 million domestic Disney+ subscribers and 152.1 million global Disney+ subscribers.

Average revenue per Disney+ subscriber was $4.35 globally (up 5% year-over-year) and $6.27 domestically (down 5% year-over-year).

The new pricing plans and bundle options could help Disney grow its overall Disney+ and streaming subscriber base, while also providing a boost to its average revenue per user. A greater emphasis was put on bundle options by Disney in its Wednesday press release.

The price of Disney+ goes up from $7.99 to $10.99 for monthly subscribers on a standalone basis. The move follows a $1 per month increase in March 2021 and follows an overall theme for streaming companies. The company recently announced a price increase for ESPN+ going from $6.99 a month to $9.99 per month and the annual plan going from $69.99 to $99.99. 

Netflix Inc NFLX announced price increases in early 2022 to take its standard plan from $13.99 per month to $15.49 per month, its basic plan from $8.99 per month to $9.99 per month and its premium plan from $17.99 per month to $19.99 per month. Netflix has an ad-supported plan coming and has not announced prices for the platform yet. 

Amazon.com, Inc. AMZN raised the pricing of its Prime membership, which includes access to its Prime Video streaming platform, in March 2022.

The new prices from Disney and others could increase focus on which platforms are necessities and which could be given up by households. The streaming races just got more competitive and costly for US consumers Wednesday.

DIS Price Action: Disney shares are up 6.80% to $120.08 in after-hours trading Wednesday.