Fans for Life
If you’re a Disney (DIS) fan, you may have noticed Disney World’s unique problem. Even when it raises ticket prices for its theme parks, crowds remain out of control.
Now Disney+ subscribers might witness a similar phenomenon. For the House of Mouse, it’s anything but a problem.
Disney recently raised the monthly cost of a Disney+ subscription by $3, or roughly 38%. Most users did not flee from the price increase, even in the midst of an economic downturn — around 94% of Disney+ users kept their subscription.
Disney first launched Disney+ in 2019 for just $6.99. Now, the cost of its ad-free Premium Plan is up to $10.99 per month, while the ad-supported tier costs $7.99 per month. Disney also offers bundled streaming packages that include access to Hulu and ESPN+ for as much as $19.99 per month. (Disney has a controlling stake in Hulu, and owns ESPN outright.)
So far, Disney’s ad-supported plan in particular has been a hit among users. One insider compared it to Netflix’s (NFLX) recent launch of a similar ad-based tier, saying Disney+ found more success by approaching it like the entertainment giant it is, rather than like a tech company.
While its competitor rolled out the ad tier by quietly testing it, Disney promoted the plan heavily — almost as if it were a new film or piece of featured content. Netflix remains the only major streaming service that’s currently profitable, but Disney+ may have just inched one step closer to that elusive benchmark.
Based on the lack of a negative reaction to this latest price hike, some believe Disney+ is still underpriced.
This is especially true considering how strongly Disney’s content resonates with children. About 50% of families subscribed to Disney+ have kids. And with franchises like Marvel, Star Wars, and Disney animated classics available exclusively on the platform, it could take at least a few more price hikes before those families are willing to pull the plug.
Disney expects to finally turn a profit on Disney+ by 2024. And if this step gets the company closer to that goal, Disney may well take it a step or two further.
For Disney+ users, this means that the current price of the streaming service might not be final. Fortunately, no matter how high it goes, chances are Disney content will remain a far sight cheaper than its theme parks.
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