During the company’s earnings call today, Disney announced a price increase will be coming to the Disney+ ad-free tier, Disney+ Premium. In addition, the Disney+ Basic level subscription will become an option for European subscribers this year.
Disney+ Premium Pricing to Increase
Disney announced during its earnings call today that a price increase will be coming to the Disney+ ad-free subscription tier. The company did not indicate how much the cost would increase, or if it would specifically impact the Disney+ Basic tier as well.
Bob Iger, the current CEO of The Walt Disney Company, reported they have “price elasticity for the service.” They are hoping to “widen the delta” between subscriptions for the ad-supported service and the ad-free service. They are also hoping to drive more subscriptions to the Disney+ Basic Tier, even though it is cheaper for customers.
On the topic, he said “The truth is we have only just begun to scratch the surface of what we can do with advertising on Disney+. And I’m incredibly bullish on our longer term advertising positioning. Meanwhile, the pricing changes we’ve already implemented have proven successful and we plan to set a higher price for our ad-free tier later this year to better reflect the value of our content offerings.”
The company hopes to do this because the earning potential of ad service in Disney+, specifically through the Disney+ Basic subscription tier, has the potential for “substantial growth in digital advertising” in the coming months. Iger states this is an opportunity for the company to lean into the ad-supported service for revenue.
The Disney+ Basic ad-tier subscription will be headed to European subscribers this year as well, though details on this release have not yet been made available.
Disney’s second fiscal quarter ran from early January to late March. The entirety of “Star Wars: The Bad Batch” season 2 aired during this quarter, and “The Mandalorian” season 3 premiered. “National Treasure: Edge of History” ended and was later canceled.
The Disney+ Basic ad-supported tier is currently priced at $7.99 a month. The company changed the service last August, when they incorporated ads and additionally offered a new Disney+ Premium tier for several dollars more if customers wanted to continue enjoying an ad-free viewing experience.
Now, in order to stream Disney+ media without seeing ads, customers are currently paying $10.99 a month for this Disney+ Premium tier.
Disney+ Basic has the largest advertising load of all ad-supported streamers. It is capable of showing up to 24 ads per hour. In addition, Disney+ Basic does not support downloadable content to watch offline, unlike the higher cost Premium tier; however, Disney+ Basic does include streaming in 4K UHD on compatible devices, and subscribers still have access to the full Disney+ library.
Viewers can stream up to four devices at the same time, as well as create up to six profiles on one account. Each device can stream something different at once, even if users are in a different physical location and on a different network.
Disney also reported on their earnings call today that they have lost millions of subscribers to the service. This comes after their first-ever drop in subscribers during quarter one of 2023. Disney+ lost another 4 million subscribers in quarter two.
What do you think of Disney+ and the different tiers? We’d like to see your opinions in the comments below.
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