Disney and Hulu Price Increases Are on the Way, and Subscribers Aren’t Happy
Key takeaways
- Disney and Hulu are both raising the prices of their streaming services — again
- Talks between the two for Disney to buy out Comcast’s remaining stake have accelerated
- Disney shares were up 1.35% on Friday
Coming soon to a Disney and Hulu streaming service near you… are more price hikes. The planned increases were announced last month, but some unfortunate subscribers only found out about the news this week thanks to a Hulu notification — and they’re pretty pissed off.
As streaming services struggle to become profitable and Disney, in particular, suffers battles from all sides, the last thing CEO Bob Iger needs now is a drop in subscriber numbers. Let’s take a look at what Disney and Hulu have planned and how customers reacted.
What’s happening with Disney and Hulu?
Many streaming services have upped their prices, citing the macroeconomic situation, and Disney and Hulu (which Disney has a majority stake in) are no exception. Starting from October 12, Disney’s ad-free tier will go from $10.99 a month to $13.99, while Hulu will cost $17.99 a month, up from $14.99.
Both of the streaming services are currently running discounts to try and take advantage of the ongoing Charter Communications dispute, where Charter cable subscribers have lost access to Disney channels after the two companies failed to reach a renewal agreement.
But that’s a steep increase, especially considering Disney has already hiked its rates twice already this year and Hulu once last year. Investors didn’t mind, though, with Disney’s share price closing 1.35% higher on Friday.
Disney’s unprofitable streaming division
It’s clear Disney (and, by extension, Hulu) wants to make its streaming service profitable ASAP, but the odds are still stacked against the House of Mouse. Disney+ has lost subscribers for the last two quarters, down from 46.6 million at the end of 2022 to 46 million in July.
Another option on the table is Disney buying out Comcast of the 33% it doesn’t already own in Hulu and merging the two subscriptions together. With Hulu worth around $30 billion, Disney would need to pay around $10 billion to get its hands on the whole company.
The idea isn’t out of the question, given that consumers would undoubtedly be happy not to pay out for two separate subscriptions, and Disney is already the majority owner. In fact, talks are already progressing — Disney and Comcast moved the discussion to the end of September, up from January 2024.
The bottom line
Price hikes are the bane of everyone’s existence right now with the cost of living crisis, and it’s only natural that Disney and Hulu subscribers are annoyed at the changes. It also raises the question of how different these streaming services are from cable, the very thing they were meant to be different from.
From an investment perspective, Wall Street will be excited about Disney fully taking over Hulu and the potential returns the two combined companies could generate. With talks moved up months ahead, we should expect an announcement soon.
