Disney is raising the price of its ad-free Disney+ to $13.99 a month and plans to launch a $19.99 premium duo that includes ad-free Hulu

Disney is raising the price of its ad-free Disney+ subscription to $13.99 per month and plans to launch a premium duo with Hulu without commercials for $19.99.

The price increase represents a 27 percent jump from the current price of $10.99 and will take effect on October 12.

Disney is also raising the price of Hulu ad-free to $17.99 per month, which is 20 percent more than the current $14.99 deal.

But it offers savings of $12 per month for those who want both plans with a new $19.99 combined offering.

It comes after Disney CEO Bob Iger vowed to crack down on password sharing as the company looks to boost profits following the release of its third-quarter financial results.

Netflix’s standard ad-free subscription costs $15.49 per month and Warner Bros. Discovery’s Max costs $15.99.

Disney’s decision to raise its Disney+ price to a similar level and charge more than its competitors for Hulu shows that the company believes its content can compete.

The company also increased the price of its trio bundle of Disney+, which includes no commercials, ad-free Hulu, and ESPN+ with ads, from $19.99 a month to $24.99 a month.

The same bundle of commercials increases by $2 to $14.99 per month.

While the cost of Hulu + Live TV with ads rises from $69.99 to $76.99 per month and the ad-free service goes up to $89.99 per month from $82.99 per month.

Disney+ launched in 2019 at the deliberately low price of $6.99. The company increased costs by $3 per month last year.

At the time, CEO Iger said, “We were pleasantly surprised that the loss of subscribers, due to a substantial price increase for the non-ad-supported Disney+ product, was minimal.

“It was a loss, but it was relatively small. That leads us to believe that we do indeed have price elasticity.’

Disney chief Igor also revealed that the company is now prioritizing ways to convert those using other people’s accounts into paying customers.

“We are actively exploring ways to address account sharing and the best options for paying subscribers to share their accounts with friends and family,” he said during a call on Disney’s quarterly earnings on Wednesday.

“Later this year, we will begin updating our subscriber agreements with additional terms to our sharing policies, and we will roll out monetization tactics sometime in 2024.”

Disney’s subscription agreements for Disney+, ESPN+, and Hulu currently state that customers “cannot share your login information with any third party.”

But it doesn’t specify whether users are allowed to share passwords with friends and relatives from different households.

When asked how widespread the problem was on Disney streaming services, Igor said, “I’m not going to give you a specific number, other than it’s significant.”

“Obviously what we don’t know is if we get going with this, how much of the password sharing, as we’re essentially eliminating it, will translate into growth in subscribers. Obviously we think there will be some, but we’re not speculating.

“However, what we are saying is that in calendar ’24 we are going to address this issue.

“So while it’s likely you’ll see some impact in calendar ’24, it’s possible that we’re not ready or the work won’t be completed within the calendar year.

“But we’ve definitely made this a real priority. And we really think there’s an opportunity here to help us grow our business.”

Disney’s third quarter financial results on Wednesday.

It beat Wall Street estimates on adjusted earnings per share and the company said it was on track to cut costs by more than the $5.5 billion it promised investors in February.

But the company missed Wall Street’s revenue targets and fell slightly short of expectations for US Disney+ subscribers, though it has cut its losses significantly.

It is struggling with an eroding television business and movie box office that has yet to return to pre-COVID levels.

Disney said it cut losses on its streaming video services to $512 million in its fiscal third quarter, smaller than the loss of about $1.1 billion a year ago.

It added 800,000 Disney+ subscribers, 100,000 subscribers behind analyst estimates, and lost 12.5 million subscribers to the Disney Hotstar service in India, or nearly a quarter of its subscribers, as it lost the rights to Indian Premiere League cricket matches. gave up.

Disney reported revenue of $22.33 billion for the quarter ended July 1, up four percent from a year ago but lower than Wall Street’s median estimate of $22.5 billion, according to data from Refinitiv.

It returned earnings per share of $1.03, excluding certain items, beating Wall Street’s forecasts of 95 cents per share.

It was not immediately clear whether the adjusted profit figures were comparably calculated.

The company took $2.65 billion in impairment and restructuring charges in the quarter, reflecting the cost of removing certain content from its streaming services, terminating licensing agreements and $210 million in termination benefits to laid-off employees.

Disney’s traditional television business continued its downturn, with lower revenues and operating income in the company’s broadcast and cable television businesses.

Higher production costs for sports programming, along with lower affiliate revenues, weighed on cable channel performance.

TV revenues for the quarter fell seven percent to $6.7 billion, while operating income fell 23 percent to $1.9 billion.

Disney’s direct-to-consumer business posted a nine percent increase in revenue to $5.5 billion, while average revenue per subscriber increased at Disney+ and Hulu.

Content sales and licensing, the unit that includes movie and television sales, reported a larger operating loss of $243 million in the quarter, compared to a loss of $27 million a year ago.

Disney’s Parks, Experiences and Products group reported a 13 percent increase in revenue in the quarter to $8.3 billion and an 11 percent increase in operating income to $2.4 billion.