Disney CEO Bob Chapek believes the content on Disney+ is worth more than what customers are paying. Since launching in 2019, Disney+ has proven itself to be an important hub for Disney content new and old. Standout programs found on the streaming service are Disney+ originals, some of which exist as extensions of popular franchises like Star Wars and the Marvel Cinematic Universe. Disney's use of the platform to expand their media franchises has garnered massive success, with Disney+ boasting over 221 million subscribers as of July 2022.
Recently, Disney has announced that there will be price increases coming to the streaming platform in December. While a version of Disney+ with ads will be available for $7.99 per month, the ad-free version of Disney+ will see a price increase to $10.99 per month. As of now, Disney+ without ads is $7.99 per month, the price of the upcoming ad-inclusive version of the streaming service. The more expensive ad-free version will be referred to as Disney+ Premium.
Despite these recent price increases, Disney CEO Bob Chapek believes the content Disney+ offers is still worth more than the subscription cost. Variety reports that Chapek sees Disney+ content as high-quality enough to justify the incoming price changes. He also states that he doesn't think the price increase will negatively impact the success of Disney+ overall:
I think we’re way underpriced relative to the value we provide.
[W]e believe our churn implications of taking up the price… will be negligible
Chapek goes on to say that having a version of Disney+ with ads "will really let us cater to diverse consumer needs," as whichever version of Disney+ people subscribe to will still net them the same content. His promotion of the price change as putting customers first echoes his mission to make Disney+ an interactive platform that places an emphasis on personalized experiences. The value Chapek sees in what gets produced for Disney+ also reflects the focus Disney hopes to put on streaming in the future. This includes a proposed "hard bundle" that would combine Disney+, ESPN+, and Hulu into one service, a hopeful idea from Chapek should Comcast ever look to sell their partial stake in Hulu.
Chapek's justification for higher Disney+ prices boasts the confidence he has in the streaming service's growth over the next few years. The money being spent on upcoming Disney+ original series seems to reflect this sentiment, such as Star Wars: Skeleton Crew's reported $136 million budget. It could also lead to more price hikes in the future. While a bundled platform between Disney+ and other streaming services is unlikely in the near future, Chapek bringing up the idea shows his grand ambitions for this avenue. While Disney+ may be hiking up their prices, it's clear that Chapek sees the decision as justified and is keen to continue growing the service.
Source: Variety