Disney to Raise OTT Fees by Up to 25% Starting October

Walt Disney will raise subscription prices for its over-the-top (OTT) streaming service platforms starting this October. The Disney Plus (+) plan with ads, the cheapest option, will increase by 25% to $9.99 per month. Along with this, a 'Continuous Play Playlist' channel that streams selected content continuously will also be launched.

According to Disney on the 6th (local time), the Disney+ ad-supported plan will increase from $7.99 to $9.99 per month, and the ad-free plan will rise from $13.99 to $15.99, both increasing by $2. Hulu will also raise prices to $9.99 for the ad-supported plan and $18.99 for the ad-free premium plan.

The bundle plan that allows watching both Disney+ and Hulu with ads will increase by 10% to $10.99 per month. The most popular plan, the 'Trio Bundle,' which includes Disney+, Hulu, and ESPN+, will see the ad-supported plan rise to $16.99 and the ad-free plan to $26.99, both increasing by $2. This price hike will take effect from October 17.

Additionally, starting early next month, Disney will offer a continuous play playlist feature for Disney+ subscribers. It will initially begin with ABC News content and children's content. This includes popular Disney+ children’s animations such as 'Sofia the First,' 'The Lion Guard,' and 'Puppy Dog Pals.' Disney stated that four more playlists will be added this fall, including Disney action series like Star Wars and Marvel, nostalgic past popular pop culture content, documentary-style channels featuring true stories, and seasonal content.

This move is interpreted as Disney’s effort to improve profitability in its streaming division. In recent months, competing OTT services like Netflix, Peacock, and Max have also been raising their prices. Bloomberg reported, "Disney is increasing OTT subscription prices by up to 25%" and noted that, like other traditional major media companies, Disney is shifting from broadcasting and cable TV?where viewership and ad revenue are declining?to OTT-centered platforms. The IT-focused media outlet The Verge described it as "Disney’s plan to increase profitability in streaming services" and "a new wave of price hikes that subscribers will not welcome." Earlier, Disney had forecasted that its streaming division could turn profitable in the fourth quarter of this year.

Following the news of the price increase, Disney’s stock price rose. On the New York Stock Exchange, Disney’s shares closed at $89.97, up more than 2% from the previous session. It has also shown a slight upward trend in after-hours trading.

Disney is also set to announce its fiscal third-quarter earnings on the 7th. According to Bloomberg’s estimates, adjusted earnings per share are expected to be $1.19. The number of Disney+ subscribers is projected to have increased by nearly 10 million year-over-year to 154.55 million.