In a significant move made by Disney, the company announced Wednesday that U.S. customers are getting a new app that combines Disney+ and Hulu content.
The company also announced that it is raising the price of the Disney+ ad-free tier later in the year.
During Disney’s quarterly earnings call, CEO Bob Iger revealed that the new streaming option will launch at the end of 2023. However, the company also plans to keep Disney+, Hulu and ESPN+ as standalone platforms.
The offering, at first, will be available for subscribers with the Disney Bundle (Disney+ and Hulu). So, instead of having to switch back and forth from each service, users will have a “one app experience,” Iger said during the call.
“On the integrated app experience that we announced today, that’s for consumers that have subscribed to both services for now,” he said. “So in other words, it’s taking what we call the ‘dual bundle’ and putting it together in one experience, which is obviously good for consumers … It’s a bigger platform, basically more content than it offered before.”
The news comes after Disney+ lost 4 million subscribers in the second quarter of 2023. Hulu gained 200,000 subs.
“While we continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our [direct-to-consumer] offerings that will provide greater opportunities for advertisers while giving subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger added.
Many of us saw this announcement coming since former Disney CEO Bob Chapek hinted at the plans in September 2022.
“Right now, if you want to go from Hulu to ESPN+ to Disney+, you have to go out of one app to another app. In the future, we may have less friction,” Chapek told Variety in an interview last year.
This also appears to support the reports that Disney is planning to buy Comcast’s stake in Hulu by 2024. Currently, Comcast owns 33% and Disney owns 66%.
Iger noted in the call that preliminary discussions have begun with Comcast but a decision of whether Comcast will sell the stake to Disney or not is still up in the air.
“How that ultimately unfolds is, to some extent, in the hands of Comcast and in the hands of basically a conversation or a negotiation that we have with them,” Iger said.
The integration follows other moves made by competitors, such as Paramount+ combining with Showtime, as well as Warner Bros. Discovery announcing its new streaming service, Max, which merges HBO Max and Discovery+ into one platform.
Subscribers in select countries outside of the U.S. already have a majority of Hulu content bundled with Disney+.
“Outside the United States, we created that with Star, which doesn’t have all the programming of Hulu, but it has a significant amount, and it’s working quite well,” added Iger.
When the streamer launched its ad-supported plan in December, the cost of its premium tier went up to $10.99/month, compared to $7.99. Disney+ will get yet another price hike for its ad-free subscription. Soon, subscribers will have to pay even more to get content with no ads.
“The pricing changes we’ve already implemented [have] proven successful, and we plan to set a higher price for our ad-free tier later this year to better reflect the value of our content offerings,” Iger said. “As we look to the future, we will continue optimizing our pricing model to reward loyalty and reduce churn to increase subscriber revenue for the premium ad-free tier and drive growth of subscribers…”