Disney To Raise Prices Of Its Streaming Products
Issue #130 — A price increase has brought on the harsh reality that its going to take a lot more to make these streaming services competitive and successful.
Disney To Raise Prices Of Its Streaming Products
When Disney Plus launched in November 2019, the quickest way to achieve scale was to undercut the streaming goliath Netflix by offering a cheaper price point of $6.99 for its ad-free streaming service. That strategy worked as Disney Plus cruised to a subscriber base of 146 million as of the most recent quarter.
Sadly, all good things must come to an end as Disney Plus, along with its corporate sibling Hulu, will be seeing a monthly price increase beginning October 12 that reflects the shift in Disney’s thinking, driven by Wall Street pressure, from acquiring subscribers to one of profit-making.
The ad-free version of Disney Plus will now cost $13.99, up from $10.99 per month, its second price increase since its launch. Meanwhile, Hulu's ad-free version will now be available at $17.99, a three-dollar increase from $14.99 per month.
The ad versions of these two streaming services will retain their price points of $7.99.
Disney’s Hulu Plus Live TV will also see price increases as the no-ad version jumps to $89.99 while the ad version jumps to $76.99. Not being left out are the streaming combo packages which are also getting price hikes.
The ad-free combo offering of Disney Plus, Hulu, and ESPN Plus saw an increase from $19.99 to $24.99 per month, while the ad version of the same package saw an increase of $2, rising to $14.99 per month.
For those not interested in having a package tied with sports, Disney is introducing a new combo package beginning September 6, christening it as a Duo Premium of ad-free Disney Plus and ad-free Hulu for $12 per month. The combo package with ads, Duo Basic, has been around and will remain at its $9.99 monthly price.
These moves come as the House of Mickey feels confident that its deep content offering will be strong enough to hold on to its customer base despite these households' tough economic challenges.
Disney’s executive chairman Bob Iger in an announcing the price increase during the company’s quarterly report conference call, said that this updated price list reflects the growing pains its streaming division is experiencing, saying, “Our streaming business is still actually very young,” and that, “we actually have not really achieved the kind of balance we know we need to achieve in terms of cost savings and pricing and money spent on marketing.”
Meaning the work of tinkering with its streaming products is nowhere to being done.
The moves by Disney reflect the difficulty these media conglomerates, including Warner Bros. Discovery, Paramount Global, and NBCUniversal, are having with their streaming products, which are all launched with much fanfare and great expectations.
These streaming services are not close to catching up to Netflix's dominance, and by keeping all their content in-house, they nearly dried up a source of steady income for their parent companies by not licensing their content to other media parties.
The maturation of these streaming services means an important phase has been reached — a make-or-break one. Can these products continue to exist successfully as stand-alone products, or are we approaching a point where bundling might be the best option for them to stay relevant, or should we expect one or two of these services to fold operations?
The clock is definitely ticking on their survival chances.
Disney Streaming Services Recap
Disney Plus loses 11.7 million subscribers, the majority of them from the Indian market. (The Streamable)
ESPN Plus loses 100,000 subscribers in Q3 2023. (The Streamable)
Hulu adds 100,000 subscribers in Q3 2023. (The Streamable)
(CNBC, The Wall Street Journal, The Verge, Seeking Alpha)
RECAP
NFL Network & NFL RedZone Channel Available As A DTC Option
The direct-to-consumer experiment of offering a cable network as a stand-alone product is officially underway. The NFL, courtesy of its streaming service NFL Plus, is making its linear channels, NFL Network and NFL RedZone, available outside of a cable subscription. With the regular season of the NFL right around the corner, sports fans who have ditched the cable packages now have an option of watching all the best live action from around the league on Sunday courtesy of the NFL RedZone channel and up-to-the-minute NFL news and analysis, as well as select live games on the NFL Network. This option, called NFL Plus Premium, will not come cheap as NFL Plus, which usually retails for $4.99, will cost $14.99 with the addition of NFL Network and NFL RedZone. The success of NFL Premium Plus as a DTC option will be closely followed by Bristol executives who are hoping to do the same with ESPN sometime in the future. (Los Angeles Times)
ESPN Enters The Gambling Arena With ESPN Bet
After lightly dipping its toes into the sports-beating business with deals with DraftKings and Caesars, ESPN is diving fully into the sportsbook business by launching its own sportsbook ESPN Bet. ESPN Bet is a partnership between ESPN and Penn Entertainment, which previously had a sportsbook deal with Barstool Sports, that is spread over 10 years and will see ESPN earn $1.5 billion as a result of its brand name being attached to the sportsbook. ESPN will also be able to purchase Penn shares through warrants worth $500 million. This deal means ESPN Bet will be the exclusive sportsbook used by the sports network and its talent and will be operated by Penn Entertainment. Still to be determined is whether ESPN employees will be allowed to use the sportsbook. Meanwhile, Barstool Sports has been offloaded by Penn Entertainment and repurchased by its lightning rod of a founder Dave Portnoy, who said, “I am never going to sell Barstool Sports ever. I'll hold it 'til I die." (Wall Street Journal, Front Office Sports, Axios,)
Neeraj Khemlani, CBS News Co-President, Steps Down
Breaking late Sunday was the news that CBS News co-president Neeraj Khemlani is stepping down from his position as the head of the unit that comprises CBS Mornings, CBS Evening News, Face the Nation, 60 Minutes, and the accompanying streaming news service. Khemlani will have a soft landing after he departs from CBS News as he will sign a multi-year deal with CBS to develop books for Simon & Schuster and produce documentaries and scripted series. Khemlani was appointed to this position as along with co-president Wendy McMahon in 2021 after the departure of Susan Zirinsky. In that time, he has remade the morning show by bringing in Nate Burelson and bolstering its on-air talent with the hires of Robert Costa, Natalie Morales, Lisa Ling, and Cecilia Vega. Khemlani’s tenure did not exist without controversy as he has been accused of being a heavy-handed boss, and CBS News HR had allegedly monitored his recent interactions. There has been no word on who will succeed him or if McMahon will inherit his duties. (Variety, New York Post)
QUICK RECAP
Stanford Steve joins ESPN’s College GameDay as a betting analyst. (ESPN Press Room)
Former CNN anchor Laura Jarrett named co-anchor of NBC News’ Saturday Today. (Inside NBC News)
Greg McElroy promoted to ESPN’s No. 2 college broadcast team. (Sports Illustrated)
Former Biden official Jamal Simmons joins CNN as a political commentator. (CNN Press Room)
Kayla Burton named sideline reporter on ESPN/ABC College Football. (Announcer Schedule/X)
Semafor’s Liz Hoffman joins CNBC as an on-air contributor. (TVNewser)
Former Golden State Warriors GM Bob Myers could be joining ESPN. (New York Post)
David Noriega joins NBC News from Vice as a correspondent. (TVNewser)
Malika Andrews will be the new host of ESPN’s NBA Countdown and NBA Finals pre and post-game coverage. (New York Post)
Former ESPN host Rachel Nichols and former NFL player Richard Sherman to join FS1’s Undisputed. (Sports Business Journal and New York Post)
Viet Dinh to leave his chief legal officer position at Fox Corp. (The Wall Street Journal)
Dianna Russini leaves ESPN for The Athletic. (Mediaite)
Former CNN and Fox News correspondent Ed Henry benched at Real America’s Voice. (Mediaite)
Peacock signs out-of-home distribution deal with EverPass Media. (Sportico)
Fox Sports acquires media rights to Saudi Pro League. (World Soccer Talk)
Inside the NBA’s Kenny Smith questions ESPN’s layoffs strategy. (Awful Announcing)
Paramount Plus adds 700,000 subscribers in Q2 of 2023. (NextTV)
Bleacher Report to feature more prominently on WBD’s Max streaming service. (Variety)
What’s the plan for the first Republican Primary Debate on Fox News? (Mediaite)
ESPN announces its 2023-2024 college football game announcers pairings and schedule. (ESPN Press Room)
Local TV stations want to wrestle local team broadcasts from RSNs. (CNBC)
How is ESPN’s partnership with sports leagues supposed to work? (CNBC)
Fall Out Boy will feature in NBC Sports’ Big Ten Football B1G Saturday Night show open. (NBC Sports Group Press Box)
Fox Corp’s stock price is higher than before the Dominion Voting Systems settlement and Tucker Carlson’s exit. (Mediaite)
Fox Business to host the 2nd GOP primary debate. (TVNewser)
ESPN radio announces its new morning show lineup. (New York Post)
Fox Sports believes in linear TV. (Front Office Sports)
Tech companies want to go after the NBA’s local media rights. (Awful Announcing)
Fox Corp. has been reducing expenses at Fox News. (The Hollywood Reporter)
What happened with the Pac-12 media rights bids? (Sports Business Journal)
Peacock to be made available on JetBlue. (The Streamable)
Former CNN head Jeff Zucker secures his first media investment at RedBird IMI. (The Hollywood Reporter)
Vice News staff continue to leave the media company. (The Wrap)
CBS Saturday Morning’s EP Brian Applegate on the morning show’s success. (TVNewser)
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A MarkHenry Media LLC publication - Issue #130 - 2023