“Obi-Wan Kenobi”, “Lando”, “Ahsoka”, “Loki”, “Ms. Marvel”, “Moon Knight”, “Hawkeye”, “She-Hulk”, “Sister Act 3”, “Zootopia +” “Pinocchio”, “Hocus Pocus 2”, “Peter Pan and 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, makes the transmission service in the United States go from $ 6.99 a month to $ 7.99. The Disney package, which includes ESPN + and Hulu, also goes up $ 12.99 to $ 13.99.
A dollar may not seem like much, but it’s important for consumers to run out of wallet for every new streaming service that pops up.
But the price increase may be the first of many to occur as the service and its extensive content library continue to expand.
“Pricing strategy did what it had to do”
When Disney (DIS) first announced the low price of Disney + in April 2019, at the investor’s day presentation there were audible glitches.
Analysts and media observers were really surprised 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 beautiful baby who looked like Yoda, a founding father of rap, a witch who loves nostalgic television and a treasure trove of other branded content, Disney + became a Goliath in the streaming world .
The service surpassed the milestone of 100 million subscribers in just 16 months, exceeding all expectations. Disney’s transmission unit has also been a lifeline for the company as the pandemic destroyed its business.
According to Andrew Hare, senior vice president of research at media firm Magid, this success gave Disney + “pricing power,” where it could raise prices just over a year after its launch.
“Disney + has been tremendously successful since the launch, I think beyond the most optimistic believers in the product,” Hare said. “The pricing strategy did what it was supposed to do. It attracted a lot of people and almost immediately, Disney + was a top-tier broadcast competitor.”
But now things have changed. Disney’s goal is not to show 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 the broadcast pie to challenge Netflix’s space at the top.
Price increases, even slight ones, can help you get there.
More, more, more
Notably, streaming companies need content that is both engaging and worth subscribing to.
Disney has it with original hits like “The Mandalorian” and “The Winter Hawk and the Soldier,” in addition to the contents of the library.
It even channels content to the service that was never intended to be transmitted. That’s the case with Marvel’s upcoming movie, “Black Widow.” This film, which has been 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 “Luca” from Pixar will also be available on the service.
But success in streaming is more, more, more.
How much more? Well, Disney plans to spend between $ 14 billion and $ 16 billion on its broadcast companies in the coming years. This money must come from somewhere. If Disney wants to meet its 2024 fiscal profitability projections, raising prices is likely to be the best way to produce high-quality content that subscribers want and be profitable at the same time.
So Friday’s $ 1 protection is likely to be just the beginning. However, that doesn’t mean you have to break the bank to get a Disney + subscription.
Hare believes there could be more price hikes in the future of Disney +, but “it could also mean consumers will cut other services to make sure Disney + stays on top of their paid services.”
“Disney + is likely to be priced lower if you consider the fans and the content,” he said. “It is now a proven and formidable transmission service and will be able to wield pricing power in the future, even if competition in transmission is fiercer.”
