Summary
Disney raised prices for its streaming packages in October 2024, marking the third consecutive year of annual subscription fee increases in the United States. The adjustments affected multiple tiers of Disney+, Hulu, and ESPN Select (formerly ESPN+), including both ad-supported and ad-free plans, as well as bundled offerings. For Disney+, the ad-supported monthly plan rose from $9.99 to $11.99, while the ad-free option increased by $3 to $18.99 per month, reflecting a nearly threefold rise since the service’s 2019 launch at $6.99. Bundled subscriptions incorporating Disney+, Hulu, and ESPN Select also saw price hikes, although some premium tiers remained unchanged.
These price increases reflect Disney’s broader strategy to balance subscriber growth with revenue generation amid intensifying competition in the streaming market. The company emphasizes that higher prices support continued investment in original content and product innovation, including features like “Streams” on Disney+, which offers curated, channel-like viewing experiences. However, the hikes occurred alongside controversial programming decisions, such as the temporary removal of “Jimmy Kimmel Live,” prompting public backlash and subscriber cancellations.
The price adjustments led to a loss of approximately 700,000 subscribers in the fourth quarter of 2024, though the increased fees generated an additional estimated $250 million in monthly revenue. Disney’s crackdown on password sharing and introduction of a Paid Sharing Program also influenced subscriber dynamics during this period. These developments mirror wider industry trends, as major streaming platforms like Netflix, Apple TV+, and HBO Max implement flexible pricing models, including ad-supported tiers, to maintain market share and profitability in a crowded marketplace.
Looking forward, Disney plans to continue refining its pricing and content strategies, focusing on selective international expansion and balancing premium offerings with advertisement-supported video on demand (AVOD) to achieve its target of 230 to 260 million subscribers by 2024. Ongoing price adjustments are anticipated as the company seeks to sustain growth and adapt to evolving consumer preferences and competitive pressures.
Overview
Disney has employed a strategic approach to its streaming services by offering a bundled package that includes Disney+, Hulu, and ESPN+ at an attractive price point. This diverse content offering across multiple platforms has helped Disney+ maintain a relatively low churn rate among subscribers. In addition to these bundled options, Disney+ is among several major streaming services, including Paramount+, Peacock, HBO Max, Hulu, and Discovery+, that provide ad-supported plans at a lower cost than their ad-free counterparts. This trend reflects a broader industry move toward offering more flexible subscription options, with Netflix recently announcing plans to explore an ad-supported tier within the next year or two.
Beyond streaming, Disney has also adapted its theme park operations in response to the COVID-19 pandemic. As parks reopened, new reservation systems were implemented to reduce crowding and enhance guest experience. According to Disney’s Chief Financial Officer Christine McCarthy, these changes are likely to persist, signaling a long-term shift in how Disney manages attendance and visitor satisfaction in its parks.
Background
Disney has been adjusting its pricing strategy for its streaming services amid a competitive and evolving market. The company introduced price hikes in 2024 as part of a broader effort to balance subscriber growth with revenue generation, following earlier announcements during its third-quarter earnings call that forecasted a modest increase in Disney+ subscribers in the fourth fiscal quarter. These adjustments coincide with the recent launch of new service bundles, such as the Disney Plus, Hulu, and Max bundles introduced in July 2024, which have not yet seen price increases but are expected to face adjustments in the near future to maintain competitive alignment and subscriber goodwill.
The price changes come at a time when Disney faces intense scrutiny over other business areas, including its handling of programs like “Jimmy Kimmel Live,” adding pressure to optimize its streaming operations. In parallel, the company has been innovating its content offerings to justify these increases. For example, Disney recently launched “Streams” on Disney+, a feature providing continuous, curated channel-like viewing experiences such as ABC News and Disney Plus Playtime, available to both Basic and Premium subscribers.
The frequent nature of price adjustments has prompted some subscriber pushback, with concerns that content improvements do not always keep pace with rising costs.
Additionally, Disney’s broader operational shifts in its theme parks, such as changes to park reservations aimed at reducing crowding and enhancing guest experiences, signal a company-wide effort to adapt to post-pandemic realities and evolving consumer expectations. These multifaceted changes underscore Disney’s strategic focus on sustaining growth and customer satisfaction across its entertainment portfolio.
Details of the October 2024 Price Increase
In October 2024, Disney implemented another round of price increases across its streaming services, marking the third consecutive year of annual hikes in the U.S. market. The changes affected multiple subscription tiers and bundled offerings for Disney+, Hulu, and ESPN Select (formerly ESPN+), reflecting Disney’s ongoing strategy to enhance profitability amid competitive streaming landscapes.
For Disney+ specifically, the ad-supported plan rose from $9.99 to $11.99 per month, a $2 increase, while the ad-free plan increased by $3 to $18.99 per month. This represents a near tripling of the ad-free monthly price since Disney+ launched in 2019 at $6.99 per month. Additionally, the annual ad-free Disney+ plan experienced a $30 increase, bringing the yearly cost to $189.99. The bundled package of Disney+ and Hulu with ads saw a $2 monthly increase to $12.99, while the ad-free bundled subscription rose to $19.99 per month. Notably, the ad-free Hulu Premium and the Disney+ and Hulu Premium bundle prices remained unchanged during this cycle.
ESPN Select’s subscription price increased from $11.99 to $12.99 per month, reflecting a $1 rise, coinciding with the bundle price adjustments involving ESPN Unlimited. Despite these price increases, Disney maintained promotional pricing for the Disney+, Hulu, and ESPN Unlimited ad-supported bundle at $29.99 per month for the first 12 months to attract new subscribers.
The October 2024 hikes come alongside the introduction of new features such as “Streams” on Disney+, which provide continuously curated channels like ABC News and Disney Plus Playtime, available to all subscribers regardless of plan. However, some subscribers have expressed concerns that frequent price increases are not always matched by proportional content enhancements. Overall, these price changes align Disney’s subscription costs more closely with competitors like Netflix, Apple TV+, and Paramount+, which have also raised prices or introduced ad-supported tiers to adapt to evolving market conditions.
Reasons for the Price Increase
Disney’s decision to raise prices for its streaming packages stems from multiple strategic and market-driven factors. Primarily, the company has emphasized that price increases are necessary to continue investing in content and improving its products. According to a company representative, regular evaluations of the business have led to these adjustments as a means to support ongoing content creation and product enhancements.
Content investment remains a significant driver behind the price hikes. Initially, Disney targeted a content spend in the low $30 billion range for 2024, although this budget was impacted by industry-wide disruptions such as writers’ and actors’ strikes, as well as a revised content strategy under CEO Bob Iger. Iger highlighted a shift toward focusing on big films, which allows for a reduction in spending on series, and mentioned selective international investments primarily in EMEA and APAC regions, albeit on a modest scale until technological improvements help reduce subscriber churn. Despite these adjustments, Disney, along with other major studios like Netflix, Amazon Prime, and HBO, is substantially increasing budgets for new content creation to compete effectively in a crowded market.
The competitive landscape and market conditions also influence pricing decisions. With numerous streaming platforms vying for viewers, companies have not only invested heavily in original and exclusive content but also adopted strategies such as consolidating streaming services, cracking down on password sharing, and introducing ad-supported tiers to maintain profitability and market share. Disney’s price increases for bundled services like Disney+, Hulu, and ESPN+ reflect this broader industry trend, aiming to balance subscriber growth with revenue generation.
Moreover, Disney aims to reach ambitious subscription targets of between 230 million and 260 million by 2024. To achieve this, the company is leveraging both premium content and advertisement-supported video on demand (AVOD) models. While higher prices align with increased content value, the growth of AVOD may moderate the overall pricing trajectory and help attract a wider subscriber base through diversified offerings.
Finally, timing also plays a role in the price adjustments. Disney typically implements price changes in October, a pattern followed in both 2023 and 2024, which helps the company maintain pricing roughly in line with its U.S. counterparts and adjust for market dynamics, such as currency fluctuations and competitive pressures. However, these increases have sometimes been criticized, especially when coinciding with subscriber dissatisfaction related to content decisions, such as the temporary removal of popular shows, which can negatively impact subscriber retention.
Public and Critical Reception
The announcement of price increases for Disney’s streaming packages prompted a mixed response from the public and critics alike. Following the raise in subscription fees—Disney+ with Ads rising from $7.99 to $9.99 and Disney+ Ad-Free from $13.99 to $15.99—Disney experienced a subscriber drop of approximately 0.7 million in the fourth quarter of 2024. Despite the decline, the company reportedly gained an additional $250 million monthly from the price hike, offsetting the revenue lost from canceled subscriptions.
However, the price increases coincided with controversial programming decisions that fueled public backlash. Notably, Disney’s decision to pull the “Jimmy Kimmel Live” show sparked widespread outrage and calls for boycotts of Disney+ and Hulu. Many media figures and consumers urged cancellations in protest, leading to a social media campaign demanding the show’s reinstatement. Although Disney eventually reversed the decision to remove the show, the timing alongside the price increase may have deterred some former subscribers from returning to the service.
Comparatively, other streaming platforms like Apple TV+ also faced subscriber churn linked to price hikes, with Apple’s churn rate increasing from 5.5% in July 2022 to 6.4% in July 2023 following a substantial 40% subscription price increase. The rising costs across multiple streaming services have become a notable trend in the industry, with competition intensifying as platforms seek to balance content investment with subscriber growth.
Impact on Subscriber Base and Revenue
Disney’s decision to raise prices for its streaming packages in October 2024 had a notable impact on both its subscriber base and overall revenue. Following the price increase, the company experienced a loss of approximately 700,000 subscribers, indicating a significant churn as some customers chose to cancel their subscriptions in response to the higher costs. This subscriber decline was partly attributed to the simultaneous crackdown on password sharing, which compelled users who previously shared accounts to either subscribe individually or discontinue service.
Despite the drop in subscriber numbers, Disney managed to generate increased revenue from the price hike. Similar to other major streaming platforms such as Netflix, Amazon, and HBO, Disney leveraged its purchasing power to demand greater film capacity, but this did not translate to an immediate increase in content volume. Instead, the short-term effect was a rise in subscription prices for the existing film capacity. This strategy mirrors broader industry trends where increased prices lead to higher monthly revenue even amid subscriber losses.
Moreover, Disney introduced a Paid Sharing Program shortly after the price increase, offering a sanctioned paid option for password sharing. This move aimed to mitigate some subscriber losses by providing a compromise between strict enforcement and user convenience. However, many subscribers expressed frustration over repeated price increases within short intervals, as content offerings did not appear to improve proportionally with the rising costs.
Comparison with Competitors
As Disney+ adjusts its pricing strategies, it faces an increasingly competitive streaming market characterized by rising demand elasticity due to the presence of several major players such as Netflix, HBO Max, Amazon Prime Video, and others. This heightened competition means consumers have more substitutes available, making them more sensitive to price changes and content offerings.
Netflix, for instance, has traditionally resisted the introduction of ad-supported tiers but recently announced plans to explore an ad-supported subscription option within the next couple of years to remain competitive. Amazon Prime Video leads in content volume, offering nearly 7,000 movies to its subscribers, which is more than any other major service analyzed. Similarly, HBO Max, Peacock, Paramount+, Hulu, and Discovery+ provide ad-supported plans that offer lower-priced alternatives to purely subscription-based models.
Apple TV+ experienced a significant increase in subscriber churn after implementing a substantial 40% price hike, with churn rising from 5.5% in July 2022 to 6.4% in July 2023, illustrating the risks associated with steep price increases in this market.
Disney+ has not only raised prices for its individual streaming service but also for bundled offerings such as the Disney+, Hulu, and ESPN Select Bundle Premium, which recently increased from $26.99 to $29.99. This move aligns with broader industry trends where companies are raising prices, investing heavily in original content, and adding ad-supported tiers or cracking down on password sharing to maintain profitability and market share.
Furthermore, Disney is exploring advertising-supported video on demand (AVOD) options and premium content strategies to meet its ambitious subscription goals, aiming for 230 to 260 million subscribers by 2024. This reflects a shift toward more flexible pricing and content delivery models to better compete with other dominant players who leverage both subscription and ad-supported revenue streams.
Future Outlook
Looking ahead to 2025 and beyond, Disney plans to continue a selective investment strategy focused on expanding its streaming business internationally, particularly in the EMEA and APAC regions. However, these investments are expected to be modest rather than large-scale, as the company emphasizes the importance of refining technology to minimize subscriber churn before committing significant resources. Disney aims to create content with global appeal while gradually prioritizing non-U.S. markets as part of its growth strategy.
In terms of content spending, Disney anticipated a reduction in its budget from $27 billion in 2023 to $25 billion in fiscal 2024, reflecting a more measured approach to investment. To support its subscriber growth goals—targeting between 230 million and 260 million subscriptions by 2024—the company is exploring a mix of premium content and advertisement-supported video on demand (AVOD) models. This combination is seen as a way to attract and retain a broader audience base.
Price adjustments are expected to continue as part of Disney’s broader strategy to enhance profitability following years of heavy investment in streaming services. After raising Disney+ prices by up to 25% in October 2023, further increases are anticipated, potentially on an annual cycle. For example, the last price hike in the UK occurred in December 2023, suggesting another rise could occur around the same time in 2024 to align with U.S. pricing trends. While new bundles combining Disney+, Hulu, and Max were introduced in mid-2024 with their own pricing structures, these are likely to see price increases in the near future as well, as Disney balances revenue growth with subscriber retention.
The content is provided by Sierra Knightley, Front Signals
