Pricing, launch date set for ad-supported Disney+ service

The Walt Disney Company has set a December 8 launch for a new, ad-supported version of the Disney+ streaming service, which costs consumers $7.99 a month and shows about four minutes of ads per hour. Meanwhile, the standalone, ad-free version of Disney+ will cost $10.99 per month, up from the $7.99 rate Disney charges today.

(Source: Jack Sullivan/Alamy Stock Photo)
(Source: Jack Sullivan/Alamy Stock Photo)

The ad-supported version of Disney+ (Disney+ Basic) will join Disney's other direct-to-consumer streaming services, Hulu and ESPN+, which are getting price hikes. Here's how they stack up:

Table 1:

Subscription Plan Monthly Annual Current***
Disney+ Basic (with ads) $7.99 N/A N/A
Disney+ Premium (No ads) $10.99 $109.00 $7.99 per month
Hulu (SVoD) Basic (With ads)** $7.99 $79.99 $6.99 per month/$69.99 per year
Hulu (SVoD) Premium (No ads)** $14.99 N/A $12.99 per month
ESPN+ With ads* $9.99 $99.99 $6.99 per month/$69.99 per year
*Effective as of August 23, 2022 (previously announced)
**Effective as of October 10, 2022
***As of August 10, 2022
(Source: Disney)

The new ad-supported form of Disney+ aims to expand the market for the premium streaming service, though the price of the ad-based service will be the same as today's ad-free Disney+.

Disney lowered its long-term subscriber forecast for Disney+ by 15 million on the low and high end. The company now expects to have between 215 million to 245 million Disney+ subs by the end of fiscal 2024, down from an earlier guided range of 230 million to 260 million. But Disney did stick with an expectation that Disney+, a service launched in November 2019, will reach profitability by the end of its fiscal 2024.

Disney+'s move into an ad-supported model fits a trend, following similar options available from HBO Max, Paramount+ and Peacock. Netflix plans to launch ad-supported tiers sometime in early 2023.

Adding to what might be a confusing mix of options for consumers, Disney also made changes (and small price increases, in certain cases) to the Disney Bundle, which provides a discount on Disney+, Hulu (SVoD) and ESPN+:

Table 2:

Subscription Plan Monthly
Disney Bundle Basic (With Ads): Disney+, Hulu $9.99
Disney Bundle Basic (With Ads): Disney+, Hulu, ESPN+ $12.99
Disney Bundle Legacy^: Disney+ (No Ads), Hulu (With Ads), ESPN+ (With Ads) $14.99
Disney Bundle Premium: Disney+ (No Ads), Hulu (No Ads), ESPN+ (With Ads) $19.99
^Existing subscribers only
(Source Disney)

Disney also announced a new pricing structure for the Hulu + Live plans:

Table 3:

Subscription Plan Monthly
Hulu + Live TV Basic (With Ads): Disney+, Hulu, ESPN+ $69.99
Hulu + Live TV Legacy^: Disney+ (No Ads), Hulu (With Ads), ESPN+ (With Ads) $74.99
Hulu + Live TV Premium: Disney+ (No Ads), Hulu (No Ads), ESPN+ (With Ads) $82.99
^Existing subscribers only
(Source: Disney)

Financial snapshot

Disney announced its wave of streaming service updates in tandem with its fiscal Q3 2022 results.

In the quarter, Disney+ added 14.4 million subs, for a grand total of 152.1 million. Disney+'s quarterly gain beat the 10 million expected by analysts.

Hulu's subscription VOD service ended the quarter with 42.2 million subs, up from 39.1 million a year earlier. Hulu's pay-TV offering ended the quarter with 4 million subs, up from 3.7 million in the year-ago quarter. Hulu ended fiscal Q3 with a combined base of 46.2 million subs, up from 42.8 million a year earlier.

ESPN+ ended the quarter with 22.8 million subs, up from 14.9 million in the year-ago quarter.

With all services rolled up, Disney has about 221.1 million total streaming subs worldwide, enough to eclipse the 220.67 million Netflix tallied at the end of its second quarter.

Disney's overall direct-to-consumer business posted quarterly revenues of $5.1 billion, up 19%. The unit's operating loss jumped to $1.1 billion.

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— Jeff Baumgartner, Senior Editor, Light Reading

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