Disney Defends Second Price Hike In Past 12 Months For Disney+

For the second time in the past 12 months, Disney is raising prices for its streaming services, including Disney+. CEO Bob Iger discussed this on the company’s earnings call, saying Disney actually has more pricing leverage–that is, the ability to raise prices–than before thanks to the appeal of the platform as he sees it.

“Every time we’ve taken a price increase, we’ve had only modest churn from that. Nothing that we would consider significant,” he said. A “churn” rate refers to losses from people leaving a given service.

Iger said the introduction of new features to Disney+ like the upcoming ESPN tile and continuous playlists, along with high-profile movies coming to the platform, gives Disney the ability to raise prices without issue.

“The pricing leverage we have is actually increased. We’re not concerned,” Iger said.

Disney+ was $7 per month when it launched in late 2019. But beginning this fall, Disney+ with ads will be $10 per month, a $2 increase over the previous price. The ad-free Disney+ tier will also go up $2 to $16. Similarly, Hulu with ads is rising to $10 a month, while the ad-free option is only going up by a buck to $19. ESPN+ with ads is also getting a dollar more expensive with a new $12 price.

Check out GameSpot’s breakdown of the price increases to see how much more you’ll have to pay.

Iger said Disney’s goal with Disney+ is to grow engagement and offer a wider variety of programming, and he believes the company is achieving that. The executive said Disney is working on creating stronger recommendation algorithms for Disney+ to keep people on the platform longer.

Disney’s streaming business just turned a profit for the first time, and Iger said he’s feeling bullish about the opportunities to grow even more in the future. This will be thanks in part to the password-sharing crackdown, he said. The crackdown began in June and will kick off in earnest this September.

“By the way, we’ve had no backlash at all to the notifications that have gone out [about password-sharing] and to the work we’ve already been doing,” Iger said.

Iger went on to say that Disney’s upcoming film slate over the next few years–including films like Moana 2, Mufasa: The Lion King, Captain America: Brave New World, Thunderbolts, and Toy Story 5–should be a big deal for Disney+ as well. They have major box office potential, he said, and can also contribute to global streaming revenue for Disney down the road.

Also during the earnings briefing, Disney discussed why it invested $1.5 billion into Epic to create experiences within Fortnite.