On December 8, subscribers to Disney’s streaming network, Disney+, will see a BIG price increase. Right now, Disney offers one subscription price — $7.99 per month or $79.99 for the year — and there are no ads.
Beginning December 8, Disney+ subscribers who want to keep their subscription ad-free will have to pay $10.99 per month — or $109.99 for the year. Guests who are fine with ads can select the ad-supported tier and will continue to pay $7.99 per month.
The price increase comes at a time when fans are frequently criticizing The Walt Disney Company for charging more and offering less — especially at the Disney Parks. However, insiders are saying that Disney CEO Bob Chapek is using this price increase to further put his stamp on the company and distance himself from former Disney CEO Bob Iger.
According to a recent report from CNBC, insiders, who are familiar with the way both Iger and Chapek think, claim that Chapek wants to distance himself from the thinking of his predecessor.
Chapek’s pricing strategy differs from the philosophy Iger espoused, according to people familiar with both men’s thinking. Iger wanted Disney+ to be the lowest-priced major streaming offering, said the people, who asked not to be named because the discussions were private. That way, customers would view Disney+ as a stronger value proposition to its competitors even if it felt other services’ content might be more robust. This is also why Iger argued to keep Disney+ separate from Hulu and ESPN+, a strategy Chapek has thus far maintained.
Iger’s strategy was to slowly raise prices over time, targeting a $1 per month increase each year for the near future, the people said. That’s what happened in March 2021, when Chapek was CEO and Iger was still chair. Disney+ jumped from $6.99 to $7.99. Iger stepped down as Disney’s chair in December.
Slow price increases would allow Disney to suck up as many consumers at each price level — $6.99, $7.99, $8.99, etc. — as possible.
The tension and differences between Iger and Chief Executive have only grown since Chapek took over as CEO in 2020. Many are accusing Chapek of prioritizing profits over people, which has led to an overall decrease in the quality that used to be associated with the Disney name. A bombshell report also claimed that Iger has let those close to him know that allowing Chapek to be named CEO was the biggest business mistake that he has ever made.
It remains to be seen how current Disney+ subscribers will respond to the high price jump. Many subscribers were able to sign up for Disney+ through the D23 Fan Club before Disney+ launched, which allowed them to pay an even lower price than the $7.99 per year.
Those subscription plans will end this November. The only way to truly judge how the price increase will go over is to see how many of those subscribers sign up for a new plan, but also which plan they sign up for. The Disney Board continues to stand behind CEO Chapek and his decisions, including the price increase.