Walter disney The Co. said Wednesday it is raising prices for U.S. streaming subscribers who want ads-free streaming as more viewers turn to what CEO Bob Chapek calls “the best value in streaming.” watch Disney+ without .
The price hike has to do with a new tiered service that Disney will launch in December for U.S. subscribers. Basic Disney+ service today costs $7.99 per month. Starting in December, the basic service will run ads, so subscribers who don’t need ads will have to upgrade to the premium service, which starts at $10.99 per month, a 37.5% increase from the current price. The annual plan costs $109.99.
“We expect the ad tier to be popular, and we expect some to want to continue ad-free,” Chief Financial Officer Kristin McCarthy said on a conference call with analysts.
Netflix’s most popular streaming plan in the US is now $15.50 a month, and its top plan is $20 a month.Several previous rate hikes to help pay for its original programming, which has become more important since Disney pulled its shows and classic movies Netflix After the license agreement between the companies expires.
Disney said it added 14.4 million new subscribers to its Disney+ streaming service in the April-June fiscal quarter.In general, subscribers to all Disney streaming services, including gourd and ESPN+, to about 221 million, putting the entertainment giant slightly ahead of Netflix in the streaming wars.
Netflix had 220.7 million subscribers at the end of June after losing nearly 1 million in the previous quarter.
Disney said paid subscriptions to Disney+ rose 31% from a year earlier, with most of that international growth. But revenue growth wasn’t as strong due to operating losses from “higher programming and production, technology and marketing costs.”
Disney’s growing streaming sales, combined with a recovery in its theme park business following a pandemic-era shutdown, led the Burbank, Calif.-based entertainment giant to beat Wall Street’s quarterly earnings on Wednesday.
Disney reported revenue of $21.5 billion for the three months ended July 2, up 26% from a year earlier.
Excluding certain items, earnings per share were $1.09. Analysts polled by FactSet expected adjusted earnings of 97 cents a share on revenue of $20.99 billion for the quarter, according to FactSet Research.
Disney said sales at its parks, experiences and products segment rose to $7.39 billion, up 70% from $4.34 billion a year earlier. These numbers represent a continued pick-up in COVID-19 restrictions that temporarily closed all Disney parks in 2020, reduced capacity for much of 2021, and continued to affect some locations, such as Shanghai Disneyland, which The location is only open for three days in the April-June season.
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