See why Disney+ beats Wall Street forecasts 0:42
New York (CNN Business) --
Disney+ just got more expensive, unless you're willing to watch ads.
The new Disney+ ad-supported subscription tier will debut in the United States on December 8 for $7.99 a month, the company announced Wednesday.
If that price sounds familiar to you, it should.
That's what consumers pay right now for Disney+, without the ads.
Disney+'s premium tier that comes without ads will now be $3 more expensive, costing $10.99 a month, the biggest price increase for the channel since its debut in November 2019. The company raised prices in one dollar in March 2021.
August 2022 releases: series and movies on Netflix, Amazon, Disney+ and HBO Max
Disney+'s price increase comes at a time when the streaming service reported a strong quarter.
The service added 14.4 million subscribers in the third quarter, beating Wall Street expectations, reaching a total of 152.1 million subscribers.
The results sent shares up as much as 5.5% in early trading after the day.
Looking at the company's overall revenue, Disney brought in $21.5bn in the second quarter, up 26% from last year, and posted net profit of $1.4bn, up 53% from a year ago.
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"We had an excellent quarter, with our world-class creative and commercial teams driving exceptional performance across our domestic theme parks, huge increases in live sports viewership, and significant subscriber growth across our streaming services," said Bob Chapek. , CEO of Disney, in the company's letter to investors on Wednesday.
Disney+ is getting $$$
Disney+ isn't the only Disney streaming service going up in price.
Hulu, which is majority-owned by Disney, is also going up in price, from $1 to $7.99 for its ad-supported plan and $2 to $14.99 for its ad-free plan.
One of the plans that won't see a price increase is Disney's premium package, which bundles the company's streaming offerings of Disney+ and Hulu ad-free along with ESPN+.
Its cost is still US $ 19.99.
This move appears to be Disney's way of pushing consumers to sign up for its full range of services instead of just one.
And from a pricing standpoint, it's hard to say no to a three-service bundle that costs just $9 more a month than Disney's biggest service.
Disney is also introducing two new bundle plans: one is Disney+ and Hulu with ads for $9.99;
the other is all three services with ads for $12.99.
The union of streaming services seems to be the new goal of media companies.
For example, Warner Bros. Discovery.
CNN's parent company announced last week that it will combine its two streaming services, HBO Max and Discovery+, next summer.
HBO Max and Discovery+ will join forces next year
If the first phase of the streaming revolution, which started around 2017, was the "Streaming War", the next phase could be considered the "Fight of the Combos".
So why is your streaming pocketbook about to take another hit?
It's because building a successful streaming service is very, very expensive.
Services like Disney+ spend millions of dollars, if not billions, creating new content that attracts old and new subscribers, as well as the expensive infrastructure to hold it all together.
Case in point: Disney's losses at its direct-to-consumer unit were $887 million in the second quarter, more than triple what it was a year ago.
Streaming growth has also shown signs of maturity, meaning slower growth.
Netflix, the king of streaming, has lost subscribers two quarters in a row this year.
Across the industry, attracting new subscribers has become more difficult, and if subscriptions are slowing down, revenue has to come from somewhere.
Raising prices is an easy way to do it.
Netflix is not in serious trouble.
It is becoming a media company
And Disney can get away with this kind of price increase considering the breadth of its library.
Disney+ is home to some of the most popular brands in all of entertainment, including Marvel Studios, Pixar, Disney Animation, and Star Wars.
Hulu also features movies from 20th Century Studios and shows from FX, among other great content.
Kareem Daniel, president of Disney Media & Entertainment Distribution, said in a statement Wednesday that the new ad-supported offering, as well as the company's new lineup of streaming plans, "will provide greater consumer choice at a variety of price points for meet the diverse needs of our viewers and appeal to an even broader audience."
Disney
