“Obi-Wan Kenobi”, “Lando”, “Ahsoka”, “Loki”, “Ms. 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 – brings streaming service to the United States from $ 6.99 per month to $ 7.99. The Disney package, which includes ESPN + and Hulu, also increases by one dollar, from $ 12.99 to $ 13.99.
A dollar may not seem like much, but it matters to consumers who run out of wallet space for every new streaming service that comes along.
But the price increase may be the first of many that will come as the service and its expanded content library continue to expand.
“Pricing strategy did what it was supposed to do”
When Disney (early) announced for the first time the low price of Disney + in April 2019, there were audible gasps at the presentation of investors’ day.
Analysts and media observers were really shocked that Disney’s new service – which hosts Star Wars, Marvel, Pixar and each season of “The Simpsons” – was about half the standard price of its biggest rival. Netflix (NFLX).
However, thanks to this price, a cute baby who looked exactly like Yoda, a founding father who raps, a witch who loves nostalgic television and a treasure trove of other branded content, Disney + has become a Goliath in the world of streaming.
The service exceeded the limit of 100 million subscribers in just 16 months, which exceeded all expectations. The Disney 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 firm Magid, the success has given Disney + “pricing power,” where prices could rise just over a year after launch.
“Disney + has been hugely successful since its launch, I think beyond the product’s most optimistic believers,” Hare said. “The pricing strategy did what it had to do. It brought in a lot of people and almost immediately, Disney + was a top streaming competitor.”
But now things have changed. Disney’s goal is not to prove that a traditional media company can adapt to the future of streaming. Like many of its other space rivals, Disney’s new goal is to own a larger piece of streaming pie to challenge Netflix’s place at the top.
Price increases, even slight ones, can help him get there.
More more More
To stand out, streaming companies need content that is as engaging as it deserves to be.
Disney has this with original hits like “The Mandalorian” and “The Winter Falcon and the Soldier”, as well as its contents in the library.
It is even channeling content to the service that was never meant to be streamed. This is the case with Marvel’s next film, “Black Widow.” This film, which was delayed due to the coronavirus, is heading to theaters and Disney + for an additional fee in July. “Cruella”, a live action film about Cruella de Vil and Pixar’s “Luca” will also be available on the service.
But success in streaming means more, more, more.
The more? Well, Disney plans to spend between $ 14 billion and $ 16 billion on its streaming businesses over the next few years. That money has to come from somewhere. If Disney wants to meet its profitability projections in fiscal year 2024, then raising prices is probably the best way to produce high-quality content that subscribers want and be profitable at the same time.
So 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 could be more price increases in the future of Disney +, but “it could also mean that consumers will cut other services to make sure they keep Disney + close to the top of their paid services.”
“Disney + will probably be undervalued when you consider the fandom and the content,” he said. “It is now a proven and formidable streaming service and will be able to exert pricing power in the future, even if the streaming competition becomes fiercer.”
