Disney is increasing the cost of Hulu and Disney+ with no ads.
In an exclusive interview with CNBC, Disney CEO Bob Chapek said that if demand remains strong, theme parks would also see a price increase.
Chapek is betting that price increases will be supported by the Disney brand.
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Another significant American corporation has increased prices once more, but this time, don’t attribute it to inflation.
Disney is raising the cost of its streaming services and hinted that a price increase for its theme parks may follow. The business announced on Wednesday that starting on December 8, the cost of Disney+ without commercials will increase by $3 per month to $10.99. Hulu with advertisements will rise by $1 per month to $7.99, while Hulu without advertisements will increase by $2 per month to $14.99.
Then, on Thursday, Disney CEO Bob Chapek told CNBC’s Julia Boorstin that as long as people keep flocking to theme parks in large numbers, there would probably be a price increase.
“We monitor demand. We don’t currently have any ideas for what we’ll do, but we work with a surgical knife here,” Chapek added. “The consumer has complete control. If consumer demand continues, we will proceed as planned. We can also take appropriate action if we observe a softening, which we don’t anticipate happening.
Disney is blaming the increases on the consistent success of its goods rather than the rising cost of materials, labour, and petrol. Disney+ exceeded expectations last quarter, adding 15 million additional subscribers, the company announced on Wednesday. Additionally, it stated that it anticipates core Disney+ (excluding Disney+ Hotstar in India) to expand by more than the 6 million subscribers it added during the third quarter of its fiscal year.
For Disney, increasing prices in response to high demand is nothing new. For decades, the cost of theme park admission has increased. The company’s parks, experiences, and goods sector reported a 70% rise in revenue during the most recent quarter, bringing total revenue to around $7.4 billion. Compared to fiscal 2019, per-person spending in domestic parks increased by 10%.
The decision to strategically curtail park visitation resulted from Disney’s desire to prevent crowding during the Covid outbreak. The change is being made to enhance the client experience. The business has also included Genie+ and Lightning Lane products, which enhance guest experiences and enable park visitors to skip queues for popular attractions.
Aside from the theme parks, Disney routinely demands dramatic price increases from cable TV providers for ESPN because it understands there is a high demand for its stable of live sports rights.
In November 2019, Disney+ made its initial debut at $6.99 per month. The cost of the ad-free offering will have increased by 57% in around three years. Over 152 million people are using the service at this time.
Since taking over as CEO of Disney when Bob Iger left, Chapek has seen his fair share of difficulties. One thing hasn’t changed, though: it seems like people still like what Disney has to offer.