Disney, Peacock, and Paramount+ are the most recent well-known streaming services to announce price increases. Disney announced plans for significant price increases for its Disney+ and Hulu premium plans on Wednesday.
The cost of the ad-free premium plan for Disney+ subscribers in the U.S. will rise from $10.99 per month to $13.99 as of October 12, the company announced. Disney said it will maintain the monthly cost of its standard Hulu tiers (with ads) at $7.99, or $9.99 for a bundle package with Disney+, or $19.99 for a bundle without ads.
Hulu, which is also owned by Disney, will raise its price hike from $14.99 to $17.99 for its ad-free tier—a 20% increase.
The Price Bump
The actions taken by Disney are a part of a wider trend that is permeating the market. Media corporations are swiftly ditching pricing strategies.
The strategies first push an endless variety of content to customers. That too at too-good-to-be-true, one-size-fits-all costs. Instead, they are aiming to maximize profits.
The advertising marketplace for streaming is picking up,” Bob Iger, CEO of Disney, told investors on the quarterly earnings call. “It’s more healthy than the advertising marketplace for linear television. We believe in the future of advertising on our streaming platforms, both Disney+ and Hulu.”
Millions of consumers signed up for Netflix when it initially started. It offered its ground-breaking service for just $8 per month. Users were excited to get access to quality content for just a small price. The typical cable TV at the time was expensive in comparison.
The streaming age began when established entertainment firms like Disney raced to release their own direct-to-consumer offerings at unreasonably low prices.
Disney announced its new prices in line with Spotify. As the music streaming platform increased its ad-free premium streaming plan by $1 per month, to $10.99. Joined by Amazon Music, which increased its individual plan for unlimited listening to $10.99 earlier this year. Followed by YouTube Music, which increased its monthly price for its individual music plan to $10.99 last month.
These so-called “streaming wars” defeat the purpose at which they were made. What were they made for? To get on-demand watching by selecting through a plethora of content, something which cable couldn’t provide.
Proving cable to be expensive, and then applying the same or more prices later in is the trick.