DISNEY raised the price of Disney+ streaming services in the U.S. because it introduced a new subscription tier, which allows for ads to be displayed during shows.
The price hikes are tied to a new tiered Disney service, which will be available for U.S. subscribers in December.
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Today, the basic Disney+ service costs $7.99 per monthly.
This basic service will begin running ads from December. A subscriber who does not wish to see ads will have to upgrade and pay $10.99 per month for a premium service. This is a 37 percent increase on current prices.
A $109.99 annual plan is available.
The result is that viewers who wish to adhere to their current pricing plan will have to view adverts during their favourite movies and shows.
This is a change that will likely make its way to U.K. after the ad supported tier launches here. It could be as soon as next.
“We expect the ad tier to be popular and we expect some people to want to stay with ad-free,”Christine McCarthy, Chief Financial Officer, stated this on a conference-call with analysts.
The price rise comes at a horrible time for consumers already struggling to keep up with rising living costs.
Netflix’s most-popular streaming plan in America is $15.50 per monthly, while its top-of the-line plan costs $20 per month.
This follows several rate increases to pay for original programming. This is even more critical since Disney pulled its classic movies and programming from Netflix in the wake of expired licensing agreements.
Disney reported that it added 14.4million subscribers in April-June to Disney+.
Total subscribers to all Disney streaming service, which includes Hulu and ESPN+, reached about 221million. This puts Disney slightly ahead of Netflix in streaming wars.
Netflix closed June with 220.7million subscribers, after losing almost 1 million subscribers during the quarter.
Disney stated that paid subscriptions to Disney+ increased by 31%, most of it internationally, in comparison to last year.
However, revenue growth was less strong because of operating losses due to higher programming, production, technology, and marketing costs.
The combination of growing streaming sales and a recovering business at the theme parks after pandemic-era shut downs led to Disney’s quarterly earnings beating Wall Street expectations.
Disney reported revenue of $21.5billion for the three months ending July 2, an increase of 26 percent over the previous year.
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