Disney+ Announces More Ads, Less Content, and Higher Fees as It Plans “One-App Experience” with Hulu Content

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The Walt Disney Company has reported its second quarter and six months earnings for fiscal 2023, and with it comes new statements from Disney CEO Bob Iger that suggest Disney+, the company’s streaming service, is about to get worse for subscribers. Per a roundup of highlights from CNN, Disney+ is planning to not only produce less content for its streaming services going forward to reduce losses and ensure bigger profits, but higher fees are also in the pipeline, with the cost of the ad-free version of Disney+ going up to “better reflect the value” of its content offerings. Disney+ will also be increasing the amount of ads in its services, and while that doesn’t sound great, the company did confirm that Disney+ is set to expand with a new subscription option that combines Hulu and Disney+ into a single app.

From a CNN report:

[…] it expects to remove some of its existing content on the streaming services, and will be taking a $1.5 billion to $1.8 billion charge in the current quarter related to the removal of that content. And CEO Bob Iger said the company will produce less content for the services going forward.

Secondly, it is looking to increasing the amount of advertising on its various services, including a European version of Disney+ with ads that will debut later this year.

And for those subscribers who want to pay for an ad-free version of Disney+, they will be paying higher subscription fees, Iger said, “to better reflect the value of our content offerings.”

The company said it saw only a very minor decrease in subscribers to the ad-included service when it raised subscription rates. And it said it wants to increase the subscription rates for the ad-free service partly to drive more subscribers to the ad-included versions, since it can make more money selling ads once it has more subscribers.

From The Hollywood Reporter:

Disney will be combining Hulu content with Disney+ content into one app in the U.S., CEO Bob Iger announced Wednesday.

The company will begin to roll out the new app by the end of the calendar year. For now, this option will only be available to consumers who have subscribed to both services.

“While we continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our DTC offerings that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger said on the earnings call.

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