October 1, 2022

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Disney+ is getting more expensive...unless you want ads

Disney+ is getting more expensive…unless you want ads

The company announced Wednesday that the new ad-supported subscription tier from Disney+ will debut in the United States on December 8 at a cost of $7.99 per month. If this price point sounds familiar, it should be. This is what consumers pay for Disney + right now without The advertisements.

Disney+’s no-commercial premium tier will now jump from $3 to $10.99 a month, the biggest price increase for the channel since its debut in November 2019. He – is Raising prices by $1 in March of 2021.

Disney+’s price increase comes as the service saw a significant quarter. The service achieved 14.4 million subscribers in the third quarter, beating Wall Street expectations. Currently, the service has 152.1 million subscribers.

The results sent shares up 5.5% in early trading after the close.

In terms of overall company earnings, Disney (DIS) generated revenue of $21.5 billion for the second quarter, up 26% from a year ago, and net profit of $1.4 billion, up 53% from a year ago.

“Our quarter was stellar, with our world-class creative and commercial teams delivering outstanding performances at our local theme parks, significant increases in live sports viewing, and significant growth in subscribers to our streaming services,” said Bob Chabek, CEO of Disney. In the company’s letter to investors on Wednesday.

Disney + gets $

Disney+ isn’t the overpriced Disney streaming service.

Hulu, which is largely owned by Disney, will get a price increase, up $1 to $7.99 for the ad-supported tier and $2 to $14.99 for Hulu without ads.

One plan that doesn’t get a price increase is the Disney Bundle Premium, which links the company’s ad-free Disney+ and Hulu streaming shows alongside ESPN+. It still costs $19.99.

The move appears to be Disney’s way of getting consumers to subscribe to its entire roster of services rather than just one. And from a pricing perspective, it’s hard to say no to a package with three services that’s $9 more per month than Disney’s biggest.

Disney (dis) It also offers two new bundle plans: the first is Disney+ and Hulu with ads for $9.99; The other is all three services with ads for $12.99.

Linking streaming services together appears to be a new focus for media companies.

Take Warner Bros. Discovery for example. CNN’s parent company announced last week that it will be combining its two streaming services, HBO Max and Discovery+, next summer.

If the first phase of the broadcast revolution, which began around 2017, is the “Broadcast Wars,” the next one can be considered the “Rumble of the Bundles.”

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So why is your streaming pocketbook about to take another hit? That’s because building successful streaming services is really expensive.

Services like Disney+ spend millions, if not billions, of creating new content that appeals to both old and new subscribers as well as the costly infrastructure that holds it together. Illustration A: Disney’s direct-to-consumer unit loss was $887 million in the second quarter Three times more than it was a year ago.
Disney CEO Bob Chapek gets a new three-year contract
The spurting growth also showed signs of maturation, i.e. slowing of growth. Netflix (NFLX)the king of broadcasting, lost subscribers Two quarters in a row this year.

Across the industry, it’s getting more and more difficult to attract new subscribers, and if signups slow down, revenue has to come from somewhere. One easy way to do this is to raise prices.

Disney can get away with this kind of price increase given the vastness of its library.

Disney+ is home to some of the most popular brands in all of its entertainment, including Marvel Studios, Pixar, Disney Animation, and Star Wars. Hulu also has feature films from 20th Century Studios and shows from FX, among other rocking content.

Karim Daniel, CEO of Disney Media and Entertainment Distribution, said in a statement on Wednesday that the new ad-supported offering as well as the company’s new suite of broadcast plans “will provide greater choices to consumers at a variety of price points to meet the diverse needs of our viewers and attract an audience.” wider.”