As its number of subscribers increases, Disney+ takes the opportunity to increase the price of its Disney+ subscription in the United States, while launching an offer including advertising. It is only a matter of time before Europe is affected.
Disney unveiled this week its results recorded in the last quarter of 2022 – closed on June 30. The entertainment giant managed to attract 14.4 million new subscribers to its Disney+ video-on-demand (SVOD) platform between March and June 2022, bringing it to a total of 152 million users. By adding the 22.8 million users of ESPN+ and the 46.5 million of Hulu – which both belong to the firm –, the Disney company reaches 221.1 million subscribers to its SVOD services. It therefore passes Netflix and 220.67 million users – which lost subscribers this year for the first time in its history. The firm hopes to continue its momentum by reaching 230 to 260 million subscribers by the end of 2024, and therefore be fully profitable. Mike Proulx, Vice President and Research Director of Forrest, explains that “in the streaming war, Disney++ is currently winning – gaining subscribers at a time when Netflix is losing. Disney+ continues to gain momentum from strong content based on its intellectual property that has universal appeal.” The platform goes for it to be able to rely on its favorite universes, namely Marvel and Star Wars, which it continues to expand.
Disney took the opportunity to announce an increase in the price of the Disney + subscription but also the arrival of a new low-cost formula with advertising. In this way, Disney+ aligns with the policies of its main competitors Netflix and Amazon. Indeed, earlier this year, Netflix revealed a new subscription that’s more affordable thanks to ads and a partnership with Microsoft – but that won’t provide access to the entire catalog. In the same vein, Amazon has increased the prices of its Prime offer – including in Europe – with an increase of almost 43% for a one-year subscription, causing a strong wave of discontent.
Disney+: an increase in prices and a subscription with advertising
To align with its competitors and be more profitable, Disney has announced new prices for subscriptions to its Disney+ SVOD platform. The formula has been renamed Disney + Premium and will go from 7.99 dollars to 10.99 dollars monthly, an increase of 37.5%. For its part, the annual subscription will go from 69.99 dollars to 109.99 dollars. Of course, the prices of its various packs, which contain Hulu and/or ESPN+ offers, will also be increased.
The firm also took the opportunity to unveil the launch of a new “low-cost” subscription which will include advertising. This one, titled Disney+ Basic, will be launched at a price of $7.99 per month, the price of the current high-end offer… These will be commercials 15 to 30 seconds long for a total of four minutes of ads per hour of content viewed. The good news is that unlike Netflix, the whole catalog will be accessible, and not all programs should be affected – let’s hope that, for a matter of ethics, children’s programs are exempt.
“It is essential that Disney+ keeps the momentum going by delivering compelling content in the second half of this year to justify not only its continued spending, but also a big price hike in December,” says Mike Proulx, acknowledging however a “questionable marketing choice at a time when consumers are feeling an additional financial pinch that could only get worse in 2023.” These changes have only been announced for the United States so far and will take effect from December 8th. If Disney has not yet mentioned the European market, there is no doubt that this change will come to us too – as in the case of Amazon, the United States often serves as a “test”.