Photo Credit: Disney+
When the streaming service Disney+ announced an increase in its subscription fees, its subscribers responded in various ways. Subscribers should be required to pay more unless they are content to view intermittent pop-up advertisements.
The streaming service cost without commercials is currently $7.99 per month for customers. With Disney+’s new ad-supported subscription tier, the $7.99 pricing point is now the tier that includes advertising.
The new plan sans the advertising costs three dollars more, at $10.99, and those who don’t want the ads to ruin their time viewing episodes on Disney+ should spend that extra money. Disney+ made the closest increase in March 2021, when it hiked its subscription rate by $1. This would be the streaming service’s biggest rise since it launched in November of 2019.
Disney+ topped Wall Street’s forecasts in the most recent quarter, attracting more than 14.4 million customers – a remarkable result. In addition, the number of subscribers to Disney+ has increased to 152.1 million as a result of this new addition. Disney+ shares increased 6.5% as soon as the news was released.
Disney is crushing competitors in the streaming industry
During the second quarter, Disney made $21.5 billion in revenue through Disney+. In contrast to the second quarter of last year, the company’s recorded income is 26% higher in this number. According to data from a year ago, net profit increased by 53% to $1.4 billion.
Disney highlighted that 221 million people currently subscribe to all of its streaming services, surpassing the 220.6 million who do so for Netflix, the streaming leader.
Disney raised its long-term projections as a result of the new information. The streaming behemoth would have accrued 260 million users by 2024, an increase of 30 million from its earlier projection of 230 million. In addition, the prediction for Disney+ products has increased from 135 to 165 million, while Disney+ Hotstar in India has increased by 80 million
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“We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership, and significant subscriber growth at our streaming services,” said Bob Chapek, Disney CEO.
Increase of Disney subscription rates for a reason
Aside from Disney+, other Disney services have increased in rates. For example, Hulu, which Disney owns in great portion, saw a change in its tiers. The ad-supported subscription package increased by $1 to $7.99, while the ad-free subscription bundle increased by $2 to $14.99.
Contrarily, there is no price rise for the Disney Bundle. Surprisingly, the price remains unchanged at $19.99. Hulu, Disney+, and ESPN+ are all included in the bundle, all of which are ad-free. According to analysts, this is not a surprise, as Disney might employ this strategy to persuade customers to choose the bundle rather than a single streaming service.
Disney recently introduced two package plans: the first is a $9.99 bundle with Disney+ and Hulu that includes advertisements, and the second is a $12.99 bundle with all three channels that also includes advertisements.
Multiple channels being bundled together is becoming commonplace among media companies. As an example, HBO Max and Discovery+ will now be included in a single bundle, according to Warner Bros.
The “Streaming Wars,” which began in 2017, may enter a new era into the “Rumble of the Bundles,” which is expected to begin in late 2022 due to this recent trend.
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What it takes for streaming companies to stay afloat
Now, it’s harder for streaming companies to draw in new users as the competition grows. The number of subscribers may not change significantly for a considerable period of time. Accordingly, businesses must devise innovative methods of generating income.
The simplest and most practical way for streaming services to boost revenue is by raising prices.
The media and entertainment distribution chairman of Disney said that the company would “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.”
Opinions expressed by Texas Today contributors are their own.