Disney raises the price of Disney+ for an ad-free plan

Disney It raises prices on nearly all of its broadcast offerings as it looks to accelerate profitability for the business.

Commercial-free Disney+ will cost $13.99 per month, up 27%, starting October 12th. Disney+ with ads will still be $7.99 per month. Disney will also expand its advertising offerings to select markets in Europe and Canada starting November 1.

Disney raises the price of ad-free Hulu to $17.99 per month, a 20% price increase. Hulu with ads will also stay Same price at $7.99 per month.

For comparison, Netflix’s standard plan without commercials is $15.49 per month. Warner Bros. Discovery’s Max $15.99 per month.

The decision to price Disney+ nearly as high as commercial-free Netflix and Max, and charge even higher for Hulu, indicates that Disney believes its content library can compete with both of those services. When Disney CEO Bob Iger launched Disney+ in 2019, he deliberately set the niche family offering at a low $6.99 a month — nearly half the price of Netflix.

Last year, Disney increased the cost of Disney+ by $3 per month. During the company’s May quarterly earnings conference call, Iger admitted he was surprised that the price increase led to minimal service cancellations.

“We were pleasantly surprised that the loss of subs, due to a significant increase in the price of a non-ad-supported Disney+ product, was due to minimal advertising,” he said at the time. “It was some loss, but it was relatively small. And that leads us to believe that we do, in fact, have pricing flexibility.”

Disney is now betting that consumers will pay more for its streaming services even as strikes by Hollywood writers and actors threaten its content pipeline in the coming months.

For consumers who want both Disney+ and Hulu without commercials, they can pay $19.99 per month in a new “premium duo” offer — a saving of $12 per month. The Disney+ and Hulu bundle with ads will not change from its $9.99 per month price.

Disney has also increased the price of its bundle of Disney+ (no ads), Hulu (no ads), and ESPN+ (with ads) to $24.99 per month from $19.99 per month. The three product bundle with commercials will be $14.99 per month, an increase of $2 per month.

Disney said Wednesday that its broadcast division lost $512 million in the fiscal third quarter. Disney+ excluding India’s Hotstar added 800,000 subscribers during this period. Disney+ finished the quarter with 105.7 million Disney+ subscribers, excluding Hotstar, and about 146 million in total.

Disney is also raising the price of Hulu + Live TV with ads to $76.99 from $69.99 per month. Commercial-free Hulu + Live TV will jump to $89.99 per month from $82.99 per month.

Watch: Bob Iger will lead Disney through this difficult time, says Jessica Reeve Ehrlich of Bank of America Securities.

Correction: This story has been updated to reflect that the ad-free Disney+ price increase will take effect on October 12th. An earlier version misstated the date.