Last night, when Jimmy Kimmel returned to his late-night hosting gig following nearly a week on the bench, he made a joke about people restarting their Disney+ and Hulu subscriptions. That followed a period of six days where many had threatened, and lots of people reportedly canceled their Disney+ subscription in protest of the Kimmel situation. While that issue is now behind them, Disney has now added a second reason people might be eager to cancel (or simply not return to) Disney+: a price hike.
Disney+ Is Going Up By $2 - $3 Next Month
In one of the strangest cases of “Read the room” in recent memory, on the day of Jimmy Kimmel’s return, Disney+ announced a (nearly) across-the-board price hike for Disney+ and all its bundles. The basic Disney+ ad-supported package, as well as the Disney+/Hulu bundle ad-supported package, will each increase by $2 per month to $11.99 and $12.99, respectively.
All other plans, including those that bundle HBO Max with Disney+, will jump by $3 a month, though packages that include Hulu + Live TV are going up even more.. The lone exception is the ad-free Disney+/Hulu bundle, which will remain at its $19.99 price point, which implies I’ve been paying too much for my plan for months. The new prices go into effect on October 21. Here's the full breakdown:
- Disney+ (With Ads) - Increases to $11.99/month from $9.99/month
- Disney+ (No Ads) - Increases to $18.99/month from $15.99/month
- Disney+/Hulu (With Ads) - Increases to $12.99/month from $10.99/month
- Disney+/Hulu (No Ads) - Remains at $19.99/month
- Disney+/Hulu/HBO Max (With Ads) - Increases to $19.99/month from $16.99/month
- Disney+/Hulu/HBO Max (No Ads) - Increases to $32.99/month from $29.99/month
- Disney+/Hulu/ESPN Select (With Ads) - Increases to $19.99/month from $16.99/month
- Disney+/Hulu/ESPN Select (No Ads) - Increases to $29.99/month from $26.99/month
- Disney+/Hulu/ESPN Select Legacy (with Ads)- Increases to $24.99/month from $21.99/month
- Disney+/Hulu+Live TV/ESPN Select (With Ads) - Increases to $89.99 from $82.99/month
- Disney+/Hulu+Live TV/ESPN Select (No Ads) - Increases to $99.99 from $95.99/month
Needless to say, it’s an odd week to make such an announcement. Disney+ has been receiving a lot of negative press already, as it was the primary tool used by those in support of Jimmy Kimmel to express their displeasure with the situation to Disney. While it’s impossible to know how many people cancelled their subscriptions in the last week, some number did. One assumes some number of them would have come back.
Disney Could See Major Declines In Disney+ Subscriptions
However, with a price increase added to the mix, that return is less certain. There’s always churn associated with price increases. Streamers know that some people will decide to cancel when a price increase happens. The expectation is that the price increase ultimately covers any lost revenue from those who cancel, while also adding some profit.
What’s more there are probably some who didn’t cancel over Kimmel who will likely choose to do over the price increase. The two things combined could lead to larger-than-usual churn on Disney+ and ultimately a significant number of lost subscribers, which could lead to losses or at least reductions in profit for Disney+.
This is the sort of thing that investment banks attending Disney’s Quarterly Earnings Calls tend to be concerned about, which in turn could leads to the worst possible thing that could happen to Disney in the eyes of executive and investors, the stock price going down.
While the price increase was almost certainly planned long before the Kimmel debacle took place, and Disney likely really wants it to start in October, the beginning of the company’s fiscal year, it feels like, from a PR perspective, holding off for a couple of weeks might not have been a bad move.
We're a little over a month away from the next Disney quarterly report. It will be interesting to see the state of Disney+ when we get there.
