23 Aug Why Streaming Services Are Pushing Subscribers to Ad Tiers [The Hollywood Reporter]
BY ALEX WEPRIN
August 23, 2023 | On Disney’s last quarterly earnings call Aug. 9, CEO Bob Iger waited until the end of his opening remarks to drop the hammer: His company’s streaming business was introducing price increases. Big ones. The monthly cost of the Disney+ and Hulu ad-free tiers would be rising by nearly 30 percent, or $3.
For a company desperately trying to turn its money-losing streaming business into a moneymaker, the pivot marked a critical strategic shift in its path to profitability. However, Iger added that “maintaining access to our content for as broad an audience as possible is top of mind for us, which is why pricing for our stand-alone ad-supported Disney+ and Hulu offerings will remain unchanged.”
Price hikes are never subtle, but the move by Disney was the latest from a company in the streaming space to try and nudge consumers ever so slightly toward its advertising-supported tier.
In July, NBCUniversal raised the price of its Peacock plans, increasing the cost of its ad tier by $1 per month and its ad-free tier by $2. In June, Paramount+ dropped its $9.99 ad-free tier in favor of an $11.99 tier that includes Showtime content, making it $2 more expensive to avoid ads. Like Peacock, its base plan rose by only $1.