Mike Windle | ESPN | beautiful pictures
Disney is increasing the price of its sports streaming service ESPN+ to $9.99 per month, a 43% increase.
The previous price of ESPN+ was $6.99 per month. The increase will begin August 23. The annual subscription to ESPN+ will increase from $69.99 to $99.99.
The impressive rate increase has accomplished several goals for Disney. Assuming customers stick with the service, this will help Disney increase revenue for its streaming products, which Still losing money for the company.
Second, Disney hopes it will remind subscribers that there’s plenty of new and valuable content on the service, including National Football League live matches, exclusive grand slam tennis matches, and more. rights from Wimbledon and the Australian Open, PGA Tour events and National Hockey League matches. ESPN+’s price hike will also help Disney pay for the most recent stuff Monday Night Football innovation, costing the company $2.6 billion a year. As part of that deal, Disney has the rights to broadcast Monday Night Football on ESPN+ at its choice.
Third, and perhaps most important to the company’s growth strategy, Disney will not change the price of its product bundle, which will remain at $13.99 per month. It includes Disney+, ad-supported Hulu, and ESPN+.
Disney has a goal to reach 230 million to 260 million Disney+ subscribers at the end of 2024. Disney ended last quarter with 137.7 million global Disney+ subscribers and 22.3 million ESPN+ customers.
While Disney didn’t analyze how many of its more than 22 million ESPN+ subscribers are paying for it through the bundle, narrowing the price difference between just paying for ESPN+ and paying for all three services Disney’s streaming will drive some single ESPN+ customers toward the bundle. That would help increase Disney+ totals, potentially helping Disney meet its 2024 goal.
Marking that milestone is arguably a top priority for Disney CEO Bob Chapek. While Disney stock tends to trade based on Disney+ subscription numbers, investors have largely ignored the quarterly performance of ESPN+ and Hulu. Disney refreshes Chapek’s contract last month until July 2025.
ESPN+ has become a stronger product over the past year as Disney moves more exclusive live games to the service. ESPN+ now includes an out-of-market NHL.TV package and PGA Tour Liveused to be both subscription products that cost $9.99 per month or more.
However, ESPN+ is not an exact replica of the ESPN cable network, which shows all Monday Night Football games and many National Basketball Association games that are not yet available on ESPN+. Cable channel ESPN continue to earn billions of dollars every year for Disney, though sales decrease every year as millions of Americans abandoned traditional pay TV.
“Being involved in the sports space is still very valuable, but you have to go where the consumer is going,” said former Disney CEO and President Bob Iger told CNBC in December. “The question that Bob [Chapek] going to solve and working on are you speeding it up or trying to speed it up, or do you hold back as long as you can? I happen to believe that the future of ESPN is bright if it can successfully make the transition to new platforms. “
Disney was up more than 3% in afternoon trading.
WATCH: ESPN’s future is bright if it can transform itself in digital transformation, says former Disney CEO Iger