If you’re a fan of Disney+, brace yourself for some changes.
The popular video streaming service may soon have a different look, feel and price.
Walt Disney Co. CEO Bob Iger made some interesting revelations about the entertainment giant’s streaming strategy during the company’s latest earnings call.
In this article, I’ll walk you through what he said and what it could mean for streaming customers.
A Disney+ and Hulu App Merger Is on the Horizon
If you’re a Disney+ subscriber, you’re likely aware of the service’s existing relationship with Hulu.
In fact, you may get your Disney+ subscription through one of the “Disney Bundle” products that include Hulu’s on-demand product, Disney+ and ESPN+ all for one monthly price. Or maybe you’re getting Disney+ included with a Hulu + Live TV subscription.
These promotions are possible because the Walt Disney Co. actually owns a majority stake of Hulu (roughly 66%), with competitor NBCUniversal holding the remaining shares.
Iger said that the majority ownership position could be leveraged to combine the Disney+ and Hulu products into one app by the end of the year. You already can find ESPN+ content within the Hulu app.
“While we continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our DTC [direct-to-consumer] offerings that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said on the call (as transcribed by The Hollywood Reporter).
It appears that these services will remain “separate” subscriptions beyond the bundling options, but that may change in 2024 when NBCUniversal has the option to sell its remaining shares in Hulu to Disney.
Ad-Free Disney+ Is Going to Get More Expensive
Iger also said that ad-free Disney+ subscribers should prepare to fork over more than the $10.99 per month they are paying now.
“We plan to set a higher price for our ad-free tier later this year to better reflect the value of our content offerings,” Iger said.
You may recall that Disney+ rolled out an ad-supported subscription in 2022. That is now priced at $7.99 per month and is expected to stay that way for now.
Iger did not say how much the ad-free option will cost, but his comments indicate that the advertisements the company has been able to sell on the ad-supported subscription make it the more lucrative model.
That likely means we’ll see the ad-free subscription price move closer to $15 per month to create a value proposition for both the customer and the company.
Since the company now prefers ad-supported customers, the ad-free customer will be forced to make a tough decision on the value of skipping commercials.
The high level of competition for streaming TV customers requires that companies continually evolve their product to both meet the demands of the market and strive for profitability.
In the case of Disney+, that means that we’re likely to see further integration with the Hulu product line as Disney looks to build a “one-stop shop” for every type of streamer.
It seems that Disney, which has struggled with profitability of its streaming service since the 2019 launch, has hit on a strategy that seems to work with ad-supported content.
So, we’ll likely see them lean into that in the coming years by offering more incentive for streamers to get on board with viewing commercials.
In the near term, it appears Disney will be using a price hike for ad-free content as a means to either push consumers to accept content with ads or squeeze more cash out of them.
Will any of these announced adjustments change your appetite for Disney+ or Hulu products? We’d love to hear your thoughts in the Clark.com community.