If you want to keep not seeing commercials, it’s going to cost you even more. Disney, the company that commands 28% of the media landscape, has announced it will raise its prices for ad-free tiers of both Disney+ and Hulu. Disney+ plus will go from $10.99 per month to $13.99 per month, an increase of just over 27%. Hulu will also raise its price $3, from $14.99 to $17.99, an increase of 20% per month. There will also be a bundle of Disney+ Premium and Hulu (No Ads) for $19.99. The yearly subscription model will also go up accordingly.
This all comes in addition to even more ad-supported tier options for international subscribers including folks in Canada and Europe. The ad-supported tiers in the United States are currently $7.99 per month for each Disney+ and Hulu. A statement in the press release reads:
“The strong momentum of our ad-supported plans in the U.S. demonstrates the importance of providing consumers with choice, flexibility and value,” said Joe Earley, President, Direct-to-Consumer, Disney Entertainment. “We are excited to expand that offering in more markets across the globe, including in Europe and Canada, and to launch a new premium duo bundle of ad-free Disney+ and Hulu this Fall, as we take steps toward making extensive Hulu content available via Disney+ later this year for Bundle subscribers.”
As The Hollywood Reporter points out, this move is a bid by Disney to “bring its direct-to-consumer business to profitability.” This move comes at a particularly interesting time for big media corporations and their streaming services with regards to the striking WGA and SAG-AFTRA members. The lack of profit sharing and residuals from streaming content are at the forefront of the guilds’ complaints against the AMPTP, of which Disney is a member.
With its estimated 150 million subscribers as of September 2022, a $3 per month increase for premium subscribers could net as much as $450 million more per month. In 2022, Disney+ had a revenue of $7.4 billion, which contributed to Disney’s total revenue of $84.7 billion that year. And lest you fear Disney has been losing money in 2023: Q1 2023 was the company’s largest on record, with $23.51 billion. Q2 tied for the second-highest ever, along with Q1 2022, at $21.82 billion. According to Reuters, Disney CEO Bob Iger’s new contract, which he signed in July, could net him five times his base salary in annual incentive bonus. His previous contract gave him $27 million per year in total compensation.
Why am I sharing all of these revenue and salary numbers? Well it’s interesting to see just what “weak” box office means to a company like Disney. Disney, who still managed to bring in $55 billion in 2022 from media and entertainment. It may only be $3 extra dollars a month out of your pocket for Disney+ and Hulu each, but look where it’s going and know who is actually benefitting.
The new tiers and prices will take effect in October, while the new Disney+ and Hulu ad-free bundle will begin September 6. Remember, both apps will merge in the fall as well, while the services will still remain separate.