As anticipated, Disney+ will introduce an ad-supported tier in the U.S. on December 8. The tier will cost $7.99 per month. In addition, Disney also raised the price of its ad-free Disney+ today, up to $10.99 per month from the previous $7.99 per month.
The new pricing for Disney’s direct-to-consumer streaming services as of December 8 (except where noted) in the U.S. will be as follows:
The company also updated its streaming packages and prices across Hulu, ESPN+ and the Disney Bundle.
On today’s fiscal Q3 earnings call, Disney CEO Bob Chapek said, “We are walking before we run in terms of seeing what the market will bear in terms of an ad load. So we’re going in very conservative upfront. We believe there’s probably going to be some more ultimate elasticity in that as we go forward.”
He said advertising demand since the launch of Disney+ has been great. “We think that by taking a conservative approach in terms of that ad load upfront will give us the ability to expand if we need to.”
Overall, the company saw significant growth at its streaming services during the quarter, adding 15.5 million subscriptions. That included 14.4 million new Disney+ subscribers of which 6 million were core and 8 million were Disney+ Hotstar.
Disney+ Hotstar is a partnership with Novi Digital Entertainment Private Limited, a wholly owned subsidiary of Star India.
Disney CFO Christine McCarthy said on today’s call that the strong Disney+ core net subscriber additions of 6 million “reflect growth in existing markets as well as launches in over 50 new markets during the quarter.” She said the company expects Disney+ core net additions in the fourth quarter to accelerate modestly versus Q3 particularly in the domestic market.
McCarthy also said that moving forward the company is separating Disney+ guidance into two categories: core Disney+ and Disney+ Hotstar. Its core Disney+ subscriber target range is 135 million – 165 million by the end of fiscal 2024. Its total subscriber base for Disney+ and Disney+ Hotstar subscribers in 2024 are expected to be 230 million to 260 million. She also guided for Disney+ to achieve profitability in fiscal 2024.