Disney + just increased prices. here’s why

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“Obi-Wan Kenobi”, “Lando”, “Ahsoka”, “Loki”, “Ms. Marvel”, “Moon Knight”, “Hawkeye”, “She-Hulk”, “Sister Act 3”, “Zootopia +”, “Pinocchio”, “Hocus Pocus 2”, “Peter Pan & Wendy” and “Chip N ‘Dale: Rescue Rangers”.
Disney + increased the cost of its monthly subscription by $ 1 on Friday. The increase – announced by the company in December – takes the US streaming service from $ 6.99 per month to $ 7.99. Disney’s package, which includes ESPN + and Hulu, also increases by one dollar from $ 12.99 to $ 13.99.

A dollar may not seem like a lot, but it’s important for consumers who are running out of wallet space for every new streaming service that pops up.

But the price hike may be the first of many to come as the service and its vast library of content continue to expand.

“The pricing strategy did what it was supposed to do”

When Disney (Dis) first announced the low price of Disney + in April 2019, there were audible gasps during his Investor Day presentation.
Analysts and media watchers were genuinely shocked that Disney’s new service – home to Star Wars, Marvel, Pixar, and every season of “The Simpsons” – was about half the standard price of its biggest rival, Netflix (NFLX).
However, thanks to this award, a cute baby who looked like Yoda, a founding father of the rapper, a nostalgic TV-loving witch, and a treasure trove of other branded content, Disney + became a Goliath in the streaming world.
The service surpassed the 100 million subscriber mark in just 16 months, which exceeded all expectations. Disney’s streaming unit has also been a lifeline for the company as the pandemic hit its business.
Disney + takes a major step forward

According to Andrew Hare, senior vice president of research at media firm Magid, this success has given Disney + ‘pricing power’ allowing it to raise prices for just over a year. after its launch.

“Disney + has enjoyed tremendous success since its launch, I think beyond even the most optimistic believers in the product,” Hare said. “The pricing strategy did what it was supposed to do. It caught a huge turnout and almost immediately Disney + was a top streaming contender.”

But now things have changed. Disney’s goal isn’t to prove that a traditional media company can adapt to the future of streaming. Like many of its other rivals in space, Disney’s new goal is to own a bigger slice of the streaming pie to challenge Netflix’s place at the top.

Even small price increases can help it achieve this.

More more more

To stand out, streaming companies need content that is both compelling and engaging.

Disney has this with original hits like “The Mandalorian” and “The Falcon and the Winter Soldier”, as well as content from its library.

It’s even about funneling content to the service that was never designed for streaming. This is the case of the next Marvel film, “Black Widow”. This film, which has been delayed due to the coronavirus, is heading to theaters and Disney + for an additional fee in July. “Cruella,” an action film about Cruella de Vil, and Pixar’s “Luca” will also be available on the service.

But streaming success is about more, more, more.

Get ready to see more movies like ' Cruella ' on Disney +
How much more? Well, Disney plans to spend between $ 14 billion and $ 16 billion on its streaming businesses over the next few years. This money has to come from somewhere. If Disney is to meet its profitability projections in fiscal 2024, increasing prices is probably the best way to produce high-quality content that subscribers want and be profitable at the same time.

So the $ 1 hike on Friday is probably just the start. However, that doesn’t mean you’ll have to break the bank for a Disney + membership.

Hare believes there could be more price hikes in the future of Disney +, but “it could also mean consumers will cut back on other services to make sure they keep Disney + on top of their services. paying. ”

“Disney + will likely be undervalued when you consider the fandom and the content,” he said. “It is now a proven and formidable streaming service and will be able to exercise pricing power in the future even as the competition in streaming becomes fiercer.”

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