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Disney+ and Hulu ad-free prices are going up; crack down on password sharing is on the way

Disney price hike

The Walt Disney Company announced significant price increases across its streaming services, including Disney+, Hulu, and ESPN+ (in a bundle), to accelerate the profitability of its direct-to-consumer business.

Beginning October 12, the ad-free version of Disney+ will increase by $3 to $13.99 per month. The ad-supported Disney+ will remain unchanged at $7.99 per month. The ad-free version of Hulu will increase by $2 to $17.99 per month, while the ad-supported version will remain at $7.99.

The price hikes represent a 27% increase for ad-free Disney+ and a 20% jump for Hulu without ads. By comparison, Netflix's premium plan without ads is $15.49 per month, and Warner Bros. Discovery's Max is $15.99.

Disney believes its content library can justify charging nearly as much as competitors Netflix and Max. When Disney+ launched in 2019, CEO Bob Iger deliberately set the price at $6.99, almost half of Netflix. After a $3 increase last year, cancelations were minimal, showing consumers' willingness to pay more.

Also, CEO Iger says the company is considering new measures to limit password sharing on Disney+. It intends to roll out new tactics in 2024 aimed at monetizing account sharing. This comes after Netflix launched a similar crackdown earlier this year.

In a statement today, CEO Bob Iger stated:

We were pleasantly surprised that the loss of subs due to a substantial increase in pricing for the non-ad-supported Disney+ product was de minimis. It was some loss, but it was relatively small. That leads us to believe that we, in fact, have pricing elasticity.

[Crack down on password sharing] While it is likely you’ll see some impact in calendar 24, it’s possible that... the work will not be completed within the calendar year. But we certainly have established this as a real priority, and we actually think that there’s an opportunity here to help us grow our business.

In addition to the price hikes, new bundled packages were also revealed. The "premium duo" of ad-free Disney+ and Hulu will be $19.99 per month, which means a $12 savings. The trio bundle with those services plus ad-supported ESPN+ will be $24.99, up from $19.99.

The streaming division lost $512 million last quarter, though Disney+ added 800,000 subscribers. The streaming service now has 105.7 million global subscribers and 146 million, including India's Hotstar.

The price increases come as potential Hollywood strikes could disrupt Disney's content pipeline. The company is betting consumers will still pay more for its services.

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