Why Didn’t Disney+ Subscribers Cancel After Hefty Price Increases in December? Value and Content
Things might just be looking up for Disney. Although the company is still grappling with streaming losses of more than $1 billion per quarter, a new report shows that 20% of new subscribers to its Disney+ flagship streaming service are choosing the new ad-supported tier, which is helping the company boost the amount of revenue per user it is able to generate.
Robbie Whelan of the Wall Street Journal also reports that Disney+ did not see a mass defection of users when the service enacted a $3 price hike in December. Although that figure translated to a 38% jump in subscription costs for the ad-free tier of the service, 94% of existing customers were willing to absorb the increase instead of canceling or downgrading to the cheaper ad-supported tier.
Some surveys from the time showed that 20% or more of Disney+ users were at risk of migrating to the ad-supported plan when it was released, so the new figures are surely allowing company executives to breathe a sigh of relief. But the data leads to the question: why didn’t more users leave Disney+ when it raised prices?
To start with, Disney+ was already incredibly cheap compared to competing streamers that many users saw the company’s logic in raising prices. Disney+ launched at $6.99 per month in 2019 and had only previously raised prices once (an increase of $1 to $7.99 per month in 2021). The December price increase from $7.99 to $10.99 still left the ad-free tier at a lower price than those of HBO Max ($15 per month at the time), Netflix ($15.49 per month for the Standard Plan), and Hulu ($14.99 per month).
The increase still leaves Disney+ on par with other ad-free offerings from streamers like Peacock and Paramount+, both of which are considered bargains at $9.99 per month for commercial-free streaming. In fact, unless Disney+ raises prices again this year — which is a possibility — it will soon be cheaper than Paramount+; that service will raise its ad-free tier rate to $11.99 per month sometime in early third quarter when it begins incorporating content from SHOWTIME onto its platform.
The other factor that led so many users to stick by Disney+ despite its price increase was content. A recent survey indicated that 40% of streaming users say they would be likely to watch a new streaming show from the Marvel Cinematic Universe. That was the highest number of any major franchise, demonstrating that while some Marvel shows have been bigger successes than others, they’re still a vitally important piece of Disney’s overall content strategy. Disney recently signaled that they were paring back on their Marvel TV shows, with an enhanced focus on quality over quantity.
Disney+ is certainly not out of the woods as far as its overall health is concerned. Big streaming losses and stiff competition in the industry are not problems that can be fixed overnight, but the numbers cited above indicate it has a high degree of customer loyalty in the United States. That will be key in helping Disney retain streaming users as it continues to flesh out its strategies for turning around that segment of its business.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”