Subscriber jump, fee increase revealed at Disney streaming presentation

Disney Plus, which now has more than 86 million subscribers, will go to $8 a month next year.
(Logo: Walt Disney Company/Handout, Graphic: The Desk)

The Walt Disney Company on Thursday said it would raise the price of its popular family-friendly streaming service Disney Plus to $8 a month, the first time the company has raised the subscription fee on the streaming service since it launched last year.

The fee increase comes after Disney Plus announced it would commit to producing 10 programs from its “Star Wars” franchise over the coming years and release a handful of theatrical films to the streaming service at no extra cost.

The announcement was made at a presentation Disney called Investor Day in which it provided an update on the future of Disney Plus and its three other streaming TV services Hulu, ESPN Plus and a forthcoming global variant of Hulu called Star.

On Thursday, Disney executives said its popular Disney Plus streaming service had grabbed 86.8 million subscribers who are willing to pay $7 a month or $70 a year to access the company’s back catalog of Disney animation films and live-action Disney Channel series and movies. Earlier this year, Disney also began incorporating family-friendly TV shows and movies from 21st Century Fox, a film studio it acquired from Fox Corporation in 2019.

In addition to those programs, Disney has released several original shows and movies direct to consumers on Disney Plus, including its most-recent Pixar film “Soul.” The company also released the live-action reboot of “Mulan” on the service for an extra $30 a month surcharge after the global coronavirus health pandemic forced it to skip theaters.

Executives on Thursday said Disney would continue to release some theatrical films directly to consumers on Disney Plus over the coming months, including a live-action reboot of “Pinocchio” starring Tom Hanks and an additional installment of the film Sister Act.

Disney said original programming was part of its core strategy with Disney Plus. The company’s hit Star Wars series “The Mandalorian” has proven to be a popular draw for the service, and the company will expand on this hype with an additional 10 shows from the franchise.

Disney has also committed to producing 10 new shows from its Marvel Comics franchise, executives announced.

All told, Disney said it would commit between $8 billion and $9 billion to producing original programs for Disney Plus by 2024 and announced it would spend between $14 billion and $16 billion producing shows and movies across all three of its streaming services by that same year.

(Image: Hulu/Walt Disney Company/Handout, Graphic: The Desk)

Hulu and ESPN Plus

When Disney Plus launched in November 2019, the company announced a special bundle that included access to its adult-oriented Hulu and sports-centric ESPN Plus streaming services for a discounted price of $13 a month.

The bundle helped draw new users to both services, with Disney executives reporting on Thursday that Hulu had grown to 38.8 million subscribers, nearly double where it was the previous year.

ESPN Plus has also seen a significant growth, with more than 11.5 subscribers streaming “billions of minutes” of content in 2020, a company executive said.

The three-service streaming bundle was limited to Hulu’s ad-supported tier, which normally costs $6 a month, a price that is subsidized by brief commercial interruptions during most programs in its content library. Bundle subscribers did not have access to Hulu’s commercial-free tier, which costs an extra $6 a month for normal subscribers.

On Thursday, Disney said it would remove this barrier and would soon launch a new three-service bundle that includes access to Hulu’s commercial-free tier for $19 a month. In addition, Hulu customers who also subscribe to ESPN Plus — either through the bundle or separately — can stream ESPN content without leaving the Hulu app on their smart TVs, tablets or smartphones.

Hulu will continue to invest in original programming under its “FX on Hulu” brand — Disney owns the popular cable network as well — while ESPN Plus will see a roster of new original shows land on the streaming service starting next year.

(Image courtesy Walt Disney Company)

Star

Disney also pulled the wraps on its international streaming plans on Thursday, revealing it would soon offer a Hulu-like programming package called Star that will be distributed in several international markets starting in early 2021.

Star will offer TV shows and movies from Disney’s catalog of family-friendly and adult-oriented shows, including titles from 21st Century Fox. The shows will sit within a “Star” section on Disney Plus in Canadian, Australian and European markets, executives said.

In Latin America, Star will be offered as its own streaming service called Star Plus. In those markets, Disney operates several linear channels that were re-branded under the Star name last month; the channels were acquired as part of the company’s deal with Fox Corporation last year. Star Plus will contain a mixture of Disney and Fox TV shows and movies along with locally-produced programming that appears on the Star pay TV network there.

The decision to launch Star overseas was made after Disney executives determined its domestic Hulu service didn’t have the same brand recognition overseas. Hulu will continue to operate stateside.

Disney’s streaming announcements on Thursday came less than two months after the company announced a seismic restructuring of its business, one that placed its full attention on direct-to-consumer relationships like those found through Disney Plus, Hulu and ESPN Plus.

As part of the shake-up, Disney released several television and film executives who were in positions that were considered to be redundant over the new plans while elevating others to key roles that included a new focus on balancing its direct-to-consumer offerings with more traditional broadcast and theatrical plans.

“We’re going to be increasing our investment in content that’s going to fuel the machines of direct-to-consumer,” Robert Chapek, the chief executive of Disney, said in a television interview in October.

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