Skip to main content

Disney+ Raises Prices for the First Time Since Its Launch

  • Nadine Ghiran - SUBTA
  • Mar 31, 2021
  • 3 minute read

Disney+, the rising streaming service, recently made good on its promise from Investor Day 2020 to raise subscription prices by $1. This is the first time the company is doing so since its launch 16 months ago. Consumers will now pay $7.99 a month, or $79.99 for a whole year.

While the price hike seems insignificant, and is still lower than the streaming service’s competition, Disney+ is gearing up for an even more content-filled future. Its growing library of on-demand shows and movies is one of the biggest motives for the $1 increase.

“We also believe we have the opportunity to increase Disney+ pricing given the additional value we will be adding to the service,” said Christine McCarthy, CFO at The Walt Disney Company, on Investor Day.

Disney+ recently surpassed 100 million subscribers, putting it at the halfway mark in comparison to Netflix. By investing in content production and increasing its prices, Disney+ can attract more subscribers to its streaming services and further position itself to becoming the leader of the streaming industry.

The Impact of Raising Subscription Prices

Raising prices for a subscription service isn’t new. As budgets for content spending grow, so do the recurring costs consumers pay. Companies shouldn’t underprice products because a price point that worked in the early days may not work over time. 

Churn rates typically increase when businesses don’t communicate a price change with their consumers and the cost no longer represents the value in what they’re paying for. That is why a pricing strategy needs to revolve around providing the exact kind of value that a consumer is willing to pay for.

Disney+’s new strategy does exactly that, with dozens of new movies and shows available for an extra dollar per month. While there’s no clear data on the impact to Disney+’s subscriber count, the company is confident in its pricing strategy and the value it brings consumers. 

The results of raising a price point could go either way, though. Netflix lost close to 130,000 subscribers in 2019 after raising its premium subscription plan by $2. The company’s reasoning followed Disney+’s: producing more content should come at a price.

Disney+’s Future Content Plans

Disney+ does not anticipate subscriber numbers to go down because of the increased prices. Instead, the company expects to reach 230-260 million total global subscribers by the end of 2024. The company understands the importance of putting out good, entertaining and relevant content in a timely manner to reach its future goals, and 2021 is serving as a launching pad to ensure everyone gets what they want.

Here is a list of some new releases by Disney+:

  • WandaVision — Marvel Studios’ first series on Disney+ was released on Jan. 15 of this year, receiving more views than Netflix’s record-breaking “Bridgerton” series
  • The Falcon and The Winter Soldier Released March 2021
  • Loki June 2021
  • Cruella — Release in theatres and on Disney+ in May 2021.
  • Black Widow — Release in theaters and on Disney+ in July 2021

These are only a few of the countless, original projects that Disney+ is working on. Over the next few years, Disney+ subscribers can expect 10 Marvel series, 10 Star Wars series, and a mix of 30 Disney live-action, Animation, and Pixar series and films in total.

The company’s efforts in growing and creating original direct-to-consumer content is a reflection of its loyalty and commitment to user satisfaction. Disney+’s content budget is expected to be between $8 and $9 billion in 2024 to keep up with the increased level of output, putting the company on a clear path toward rising as the leader of the streaming industry.  

Key Takeaways:

  • Disney+ raised its prices by $1/month.
  • The company plans to release an avalanche of content in the next few years.
  • Disney+ expects to have 230-260 million total global subscribers by the end of 2024.
  • Avoiding customer churn when raising prices depends on the value provided by the business.

Are you looking to learn more about the latest video streaming trends in the subscription industry? Join SUBTA. We’re a community of doers, excited to share insights, make connections and grow your subscription brand.