The Walt Disney Co. said Wednesday that it is raising prices in the US for streaming customers who want to watch Disney+ without ads, as more viewers see what CEO Bob Chapek describes as “the best value in streaming.”
The price hike is tied to a new tier of service that Disney will launch for US customers in December. The basic Disney+ service costs $7.99 per month today. Starting in December, that native service will run ads, so a customer who doesn’t want any ads will need to upgrade to a premium service that starts at $10.99 per month, which is 37.5% off current prices. An annual plan will cost $109.99.
“We expect the ad tier to be popular and we expect some people to want to remain ad-free,” Chief Financial Officer Christine McCarthy said on a conference call with analysts.
Netflix’s most popular streaming plan in the US is now $15.50 per month, and its top plan is $20 per month. This follows a number of rate hikes to help pay for its original programming, which has become even more significant as Disney moves its programming and classic films from Netflix after the license agreement between the companies expires. pulled after.
Disney said it added 14.4 million subscribers to its Disney+ streaming service in the April-June fiscal quarter. Overall, subscribers to all Disney streaming services, including Hulu and ESPN+, amounted to about 221 million, which put the entertainment giant slightly ahead of Netflix in the streaming wars.
Netflix ended June with 220.7 million subscribers after losing nearly 1 million subscribers in the previous quarter.
Disney said paid subscriptions for Disney+ increased 31% internationally, much higher than the same period last year. But revenue growth was not as strong due to operating losses from “high programming and production, technology and marketing costs.”
Disney’s rising streaming sales, coupled with the theme park business recovering after a pandemic-era shutdown, led California-based entertainment giant Burbank to beat Wall Street’s expectations with quarterly earnings on Wednesday.
Disney reported $21.5 billion in revenue in the three months to July 2, up 26% from the same period last year.
Earnings per share excluding certain items increased to $1.09. Analysts forecast adjusted earnings of 97 cents per share on revenue of $20.99 billion for the quarter, according to FactSet Research.
Disney said sales in its parks, experiences and products segment rose to $7.39 billion, up 70% from $4.34 billion a year ago. The numbers represent the ongoing withdrawal from COVID-19 restrictions, which temporarily closed all of Disney’s parks in 2020, reduced capacity through 2021 and continued to affect some venues such as Shanghai Disneyland, which opened in April. I was only open for three days. June quarter.