Disney+ will raise its U.S. prices to $7.99 a month in the U.S. as the company invests heavily in more original programming and pushes to significantly increase its international subscription footprint.
The price hike, which goes into effect on March 26, 2021, was announced during a news-packed, four-hour virtual presentation to investors on Thursday. The new $7.99 per month price, or $79.99 per year for an annual subscription, means the Disney+ bundle, which includes Disney+, Hulu and ESPN+, will also cost more. That bundle will now be priced at $13.99 per month.
The move comes amid a remarkable pace of growth for the burgeoning streaming service that has quickly become one of the most successful example of a traditional media company transitioning to streaming.
Disney’s direct-to-consumer business has remained the most pandemic-proof part of its business, as in-person parks and experiences, theatrical revenue and traditional television advertising have been battered by the ongoing Covid-19 pandemic. And Disney+, which only debuted in November 2019, is still seeing remarkable early growth.
The streaming service had 86.8 million subscribers as of Dec. 2 — an addition of more than 13 million subscribers in the two months since Disney announced the streamer had cleared 73 million subscribers as of October. About 30% of those subscribers come to the service through Disney+ Hotstar — a sign of the strength of that brand in certain international markets.
Across all Disney’s streaming properties, the company boasts 137 million subscribers. In addition to Disney+, its biggest, there are 38.8 million subscribers to Hulu and 11.5 million subscribers to ESPN+.
“Needless to say, Disney+ has exceeded our wildest expectations,” Disney CEO Bob Chapek said Thursday. “This success has bolstered our confidence in our continued acceleration towards a DTC-first business model. And more importantly, it’s launched the Walt Disney Company into a new era of delivering consumers truly exceptional entertainment built around our world-renowned brands and franchises.”
Disney now expects to have between 230- and 260 million Disney+ subscribers by its 2024 fiscal year — an eye-popping new projection that’s about three times more than the company’s initial projections it first offered about a year ago. Overall, Disney hopes to have between 300-350 million subscribers for all of its streaming services by fiscal year 2024, said chief financial officer Christine McCarthy.
Those huge numbers come with pressure for the company to offer up new programming that can keep customers coming back. The stress is especially great in its attempts to appeal to viewers without children. Disney is hoping that its line-up of upcoming shows will help deliver on all those fronts. Over the next several years, Disney+ will have 10 Star Wars series, 10 Marvel series, 15 live-action and animated projects from other Disney properties, and 15 live-action and animated feature films, said Kareem Daniel, Chairman, Disney’s head of media and entertainment distribution. (Daniel was promoted in October as part of a major streaming-centric restructuring.)
“Since streaming has quickly become a preferred method of consumption, we are prioritizing our DTC platforms, both in terms of how we distribute our content, and also through our increased investment in original programming for Disney+, Hulu, ESPN+ and our upcoming Star-branded international general entertainment offering,” Daniel said. “Significantly ramping up production for these services will not only accelerate the growth of our DTC businesses, but also solidify our deep and very personal relationship with consumers globally.”
That significant and accelerated expansion is evident in the number of new projects announced Thursday, many of which are targeted toward older viewers. The company unveiled dozens of new projects, from new Star Wars series, including titles like Rangers of the New Republic, Ahsoka and Lando, new Marvel series like Secret Invasion, Ironheart, Armor Wars and a Guardians of the Galaxy Holiday Special. On top of that, there are the sequels, prequels and spinoff series and films like The Lion King, Hocus Pocus, The Mighty Duck, Moana and more. The company new previewed first footage and detailed new line-ups of programming, including a major deal with ESPN to bring SEC college football games to ABC in 2024 and to ESPN+ as soon as next year.