Disney+ prices have doubled since 2019 with the recent price hikes. Subscribers are fleeing.
Disney’s road to profitability for its streaming services means cutting vast swathes of content and raising prices on consumers who enjoy Disney+ and Hulu by more than 20% across the board in a single price hike. The price has risen 50% since it was first introduced nearly five years ago. Disney CEO Bob Iger also signaled the service will begin a crackdown on password sharing since the practice seemed to work out for Netflix.
“Our streaming business is still actually very young,” Iger told investors. “Because we’re new at all this,” Iger says the business is still figuring out how to balance the costs of running the business with pricing to customers.
Now the ad-free version of Disney+ costs $13.99 per month, up from its introductory price of $6.99. These price changes are only impacting the ad-free versions of Disney+ and Hulu—Iger notes the ad-supported versions will remain the same. The streaming giant has lost more than $10 billion in its direct-to-consumer business segment. Disney says these price increases are aimed at helping the streaming business break even by September 2024.
Iger blames the low cost of Disney+ and the “zeal to grow global subscribers” as part of the reason why the segment is losing so much money. The price hike earlier this year primed the audience for another, which Iger believes won’t further reduce demand among those who are already subscribers.
Disney’s revenue rose 3% year-over-year in Q3 to $22.3 billion, but the streaming service lost more than 12 million subscribers. Disney+ subscribers are down 157 million in Q32 to 146 million in Q3—most of that susbcriber shed came from its Disney+ Hotstar service in India. While subscribers may be down, Disney says its ad-supported Disney+ segment is growing in the United States. Ad-supported Disney+ gained 3.3 million new subscribers.