“Obi-Wan Kenobi,” “Lando”, “Ahsoka”, “Loki”, “Mrs. Marvel”, “Moon Knight”, “Hawkeye”, “She-Hulk”, “Sister Act 3,” “Zootopia + , “” Pinocchio “,” Hocus Pocus 2 “,” Peter Pan & Wendy “and” Chip N ‘Dale: Rescue Rangers “.
Disney + increased the cost of its monthly subscription by $ 1 on Friday. The increase – which the company announced in December – takes the streaming service in the United States from $ 6.99 a month to $ 7.99. The Disney package, which includes ESPN + and Hulu, is also climbing a dollar, from $ 12.99 to $ 13.99.
A dollar may not seem like much, but it is important for consumers who are running out of wallet space for every new streaming service that comes up.
But the price increase may be the first of many, as the service and its extensive content library continue to expand.
“The pricing strategy did what it should”
When Disney (DIS) First announced the low price of Disney + in April 2019, there were audible sighs at the presentation of the investor’s day.
Analysts and media watchers were genuinely shocked that Disney’s new service – which houses Star Wars, Marvel, Pixar and all seasons of “The Simpsons” – cost about half the standard price of its biggest rival, Netflix (NFLX).
However, thanks to this price, a cute baby who looked like Yoda, a founding father of rap, a witch who loves nostalgic TV and a treasure trove of content from another brand, Disney + has become a Goliath in the world of streaming.
The service surpassed the mark of 100 million subscribers in just 16 months, which exceeded all expectations. Disney’s streaming unit was also a lifeline for the company as the pandemic hit its business.
According to Andrew Hare, senior vice president of research at media company Magid, this success gave Disney + “pricing power”, where it could raise prices just over a year after launch.
“Disney + has been a tremendous success since launch, I think beyond even the most optimistic who believe in the product,” said Hare. “The pricing strategy did what it should. It brought in a lot of people and almost immediately, Disney + was a first-rate streaming competitor.”
But now things have changed. Disney’s goal is not to prove that a traditional media company can adjust to the future of streaming. Like many of its other rivals in space, Disney’s new goal is to own a bigger slice of the streaming pie to challenge Netflix’s position at the top.
Price increases, even small ones, can help to get there.
More more more
To stand out, streaming companies need content that is attractive and worth signing up for.
Disney has it with original hits like “The Mandalorian” and “The Falcon and the Winter Soldier”, as well as its library content.
It is even channeling content for the service that was never made for streaming. This is the case for the next Marvel film, “Black Widow”. This film, which was postponed because of the coronavirus, is going to theaters and Disney + for an extra fee in July. “Cruella”, a live action film about Cruella de Vil, and “Luca” from Pixar will also be available on the service.
But streaming success is all about more, more, more.
How much more? Well, Disney plans to spend between $ 14 billion and $ 16 billion on its streaming endeavors in the coming years. That money has to come from somewhere. If Disney wants to meet its profitability projections in fiscal year 2024, raising prices is probably the best way to produce high-quality content that subscribers want and at the same time be profitable.
Therefore, the $ 1 increase on Friday is probably just the beginning. However, this does not mean that you will have to break the bank for a Disney + subscription.
Hare believes there may be more price increases in the future for Disney +, but “it could also mean that consumers will cut back on other services to ensure they keep Disney + close to the top of their paid services.”
“The price of Disney + is likely to be even lower when you consider fandom and content,” he said. “It is now a proven and formidable streaming service and will be able to exercise pricing power in the future, even if the competition in streaming becomes more fierce.”
