The Walt Disney Co. said it plans to raise the price of its fast-growing Disney Plus service by $1 a month to $7.99 a month in March..
Disney also aggressively raised its targets for how many subscribers it will have by 2024, and for how much it will be spending on content. The additional subscriber revenue will be put back into the business to make the streaming services grow, so the company still targets profitability in 2024, with peak losses in 2021, the company Disney CFO Christine McCarthy said.
The price increase reflects increase in the underlying value of the service,” said McCarthy Thursday during the company's investor day, where analysts were overwhelmed with the amount of original content the direct to consumers services would be streaming over the next few years.
For U.S. customers, Disney Plus will be available for $79.95 a year.
Disney is also raising the price of its Disney Plus, Hulu and ESPN Plus bundle by $1 to $13.99 per month.
Prices will also be going up internationally, including by 2 Euros in Europe per month for Disney Plus.
For all of Disney’s DTC services--Disney Plus, Hulu and ESPN Plus, Disney expects to have between 300 and 350 million global subscribers by the end of 2024, up from 137 million as of Dec. 2.
The company expects to have between 230 million and 260 million Disney Plus subscribers globally, with 30% to 40% of those being from the Disney Plus Hotstar international service.
For Hulu, Disney expects to have 50 million to 60 million subscribers by 2024, up from the 40 million to 60 million predicted in 2019.
ESPN Plus will be adding original content to make the product more broadly popular and expects to have 20 million to 30 million subscribers by the end of 2024. It expects ESPN Plus to be profitable in 2023.
At its 2019 DTC investor day Disney said it expected content spending to grow from $2 billion in 2020 to $4 billion in 2024. Now the company expected content spending for Disney Plus to be between $8 billion to $9 billion, representing fund going to the original five core brands--Disney, Marvel, Star Wars, National Geographic and Pixar-- plus sending for Star internationally, including acquiring local content.
Content spending for its DTC business is expected to reach $14-16 billion by 2024, including some sports rights, but excluding programming cost for Hulu Plus Live TV.
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.