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Disney raises the price of its sports streaming service ESPN+ to $9.99 a month, a 43% increase.
ESPN+’s previous price was $6.99 per month. The increase will start in August. 23. ESPN+ annual subscription will jump from $69.99 to $99.99.
The dramatic upsurge solves several problems for Disney. Assuming customers stay with the service, this should help Disney increase revenue from its streaming products, which are still losing money for the company.
Second, Disney hopes to remind subscribers that there is a lot of new and valuable content on the service, including live NFL matches, exclusive Grand Slam tennis matches from Wimbledon and the Australian Open, PGA Tour tournaments, and National Hockey League games. Raising the price of ESPN+ will also help Disney pay for the latest Monday Night Football updatewhich cost the company $2.6 billion a year. As part of the deal, Disney has the right to simulcast Monday Night Football on ESPN+ when the company decides.
Third, and perhaps most importantly for the company’s future strategy, Disney is not changing the price of its package, which will remain at $13.99 per month. It’s made up of Disney+, ad-supported Hulu and ESPN+.
Disney has a goal to achieve 230 to 260 million Disney+ subscribers by the end of 2024. Disney ended last quarter with 137.7 million Disney+ subscribers worldwide and 22.3 million ESPN+ customers.
While Disney hasn’t disclosed how many of ESPN+’s more than 22 million subscribers are paying for it through the bundle, narrowing the price gap between paying for ESPN+ alone and paying for all three of Disney’s streaming services should budge some ESPN+ individual customers. to the bundle. This will help increase the cumulative number of Disney+, potentially allowing Disney to meet its 2024 goal.
Reaching this mark is perhaps Disney CEO Bob Chapek’s top priority. While Disney stock tends to trade on Disney+ subscription numbers, investors largely ignored ESPN+ and Hulu’s quarterly results. Disney updated Chapek contract last month until July 2025.
ESPN+ has become a stronger product in the past year as Disney brings more exclusive live games to the service. ESPN+ now includes unsold NHL.TV package as well as Live PGA Tourwhich were once both subscription products that cost $9.99 a month or more on their own.
However, ESPN+ is not a replica of ESPN’s cable network, which shows all Monday Night Football games and many NBA games not yet available on ESPN+. ESPN cable channel continues to accept billions of dollars yearly for Disney though sales drop every year as millions of Americans are moving away from traditional pay TV.
“Being in sports is still very valuable, but you have to go where the consumer goes,” former Disney chairman and CEO Bob Iger. told CNBC in December. “The question that Bob [Chapek] will deal with and deal with, are you speeding it up or trying to speed it up, or are you holding back as long as you can? I believe ESPN has a bright future if it can successfully transition to new platforms.”
Disney shares are up more than 3% in afternoon trading.
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