Disney, the entertainment giant, has announced that it will raise the prices of its ad-free streaming services, Disney+ and Hulu, by $3 per month, starting from October. The company also said that it will intensify its efforts to stop password sharing among its subscribers, which could generate more revenue in the long term.
The price hikes, which will make the ad-free versions of Disney+ and Hulu more expensive than Netflix’s most popular plan, are part of Disney’s strategy to make its streaming business profitable. The company reported a net loss of $460 million in its fiscal third quarter, despite a 4% increase in revenue. The company also lost customers in both domestic and international markets, mainly due to the impact of the COVID pandemic on its content production and distribution.
Disney CEO Bob Iger said that the price increases are intended to encourage customers to switch to the cheaper ad-supported tiers of Disney+ and Hulu, which will not change their prices. He said that the advertising market for streaming is “picking up” and that it is healthier than traditional TV ads. He also said that the company will use artificial intelligence to automate the production of its content and reduce costs.
Iger also said that the company will crack down on password sharing, which is a common practice among streaming users who share their login credentials with friends or family members. He said that the company could reap some benefits from this move in 2024, although he did not provide any details on how the company will enforce it or how many password sharers will convert to paying customers.
Disney’s streaming rivals, such as Kering and LVMH, have been expanding their portfolios with high-end brands such as Valentino and Tiffany. Iger said that Disney’s streaming services offer “a broad range of lifestyle and luxury products” that appeal to a global audience. He said that the company will continue to invest in its original content, such as Marvel and Star Wars franchises, as well as acquire new assets.
Disney’s streaming services include Disney+, Hulu, ESPN+, Star+ and Hotstar. The company has more than 200 million subscribers worldwide.
Netflix to crack down on U.S. password sharing by end of June 2023