Hulu to add Disney+ and ESPN+ to live TV bundle, hike price by $5

AppleInsider

Hulu is changing the structure of its base live TV subscription offering and in December will add access to Disney+ and ESPN+ as part of a package deal that costs customers an extra $5 a month.

In an email to customers on Friday, the Disney subsidiary said Hulu + Live TV will no longer be offered as a standalone product, with Disney+ and ESPN+ to be tacked on as a package deal starting Dec. 21. The change raises monthly fees by $5, bringing the ad-supported tier to $69.99 per month and the ad-free offering to $75.99 per month, reports The Hollywood Reporter.

Users with existing Disney+ or ESPN+ subscriptions will see those products rolled into the live TV plan. Customers who subscribe to Hulu's live TV and Disney+ package are in for a price reduction from the current $72.99 a month for the ad-supported tier and $78.99 per month without ads.

The change appears to be part of Disney's strategy to boost Disney+ subscriber numbers.

Earlier in November, Disney reported the slowest sequential growth for Disney+ in the service's short history. Previous quarters saw booming demand that gained 100 million subscribers in just 16 months, vastly outstripping Disney's own internal estimates. For the most recent period, however, Disney+ managed to add only 2.1 million new users, finishing September well below Wall Street expectations with 118.1 million subscribers.

According to Disney's quarterly report, four million people pay for the Hulu + Live TV package, meaning net Disney+ adds as a result of the December change will be less than that figure because some of those users already subscribe to Disney+. Disney has not revealed subscriber numbers for the Hulu + Live TV and Disney+ bundle.

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docno42

The house of mouse is desperate to prop those flagging Disney+ subscription numbers up, eh?

chadbag

Disney:  de-politicize your "content" and you'll see your subscription numbers flourish.  

mustseeuhdtv

Those packages are getting to be cable TV prices….swapping hundreds of channels for a few streaming content libraries.

neverindoubt

MustSeeUHDTV said:

Those packages are getting to be cable TV prices….swapping hundreds of channels for a few streaming content libraries.

Hulu+Live TV is hundreds of channels. It’s got a bundle of linear TV channels just like a cable package.

 But your point remains. Hulu+Live TV plus internet access costs as much or more than a cable package plus internet access.

marvin

docno42 said:

The house of mouse is desperate to prop those flagging Disney+ subscription numbers up, eh?

I wouldn't describe 118 million paying subscribers as flagging. The main problem with Disney+ is pricing it too low. They make $4.12/m per subscriber. For Hulu, they make $12.75/m just for the streaming and $84.89/m for streaming plus live TV.

Disney+ = 118m x $4.12 = $486m
ESPN+ = 17m x $4.74 = $80m
Hulu streaming = 39m x $12.75 = $497m
Hulu live + streaming = 4m x $84.89 = $339m

They have 29x more subscribers on Disney+ than Hulu + Live but only make 43% more revenue.

https://thewaltdisneycompany.com/app/uploads/2021/11/q4-fy21-earnings.pdf

Currently they still make more revenue from the traditional TV network - $6.6b vs $4.5b (last quarter) - and they lost money on streaming. Last quarter net income for traditional network was $1.6b and $0.6b loss for streaming.

"The higher loss at Disney+ was due to higher programming and production, marketing and technology costs."

I think they are pricing these services too low. People are accustomed to paying $50+/month for regular network TV. The lower price can boost subscriber numbers but it's no good if the service loses money because long-term they don't have the budget to invest in good content. Disney+ has Premier Access for new movies but that's still pay-per-movie and way too much for a single movie.

There's a middle ground somewhere for higher subscription options that allows for more premium content. The subscriber numbers will be lower at the higher price but it shouldn't impact revenue much as Hulu shows. Disney makes more revenue from Hulu with 1/3 the subscribers just due to the higher subscription price.

Adding Disney+ and ESPN+ will be to drive some of the much higher subscription volume on those services to the higher price tier. They have a few bundles that merge different services, the $10-20/m range is probably going to offer the best content value for subscribers and sustainable revenue for providers.

edited November 2021

georgebmac

Hulu vs Hulu Live:

For 10 times more ($60+ vs $6) you get to watch network TV available for free with a low-cost digital antenna plus a few cable news stations.

I think I'll pass.

docno42

Marvin said:
I wouldn't describe 118 million paying subscribers as flagging. 

The vast bulk of those were from their initial launch.  Their growth has been flat for over six months now - they have hit a wall and hit it hard.   

Which is why they are desperate for a way to bulk up their subscription numbers to keep wall street happy.  

Good luck to them.  As @chadbag points out if they focused more on entertaining and less on pontificating they probably wouldn't have near the growth problem.  Then again I should thank them for their BS - I'm saving a ton of money not subscribing to them  

edited November 2021

marvin

docno42 said:

Marvin said:
I wouldn't describe 118 million paying subscribers as flagging. 

The vast bulk of those were from their initial launch.  Their growth has been flat for over six months now - they have hit a wall and hit it hard.   

Which is why they are desperate for a way to bulk up their subscription numbers to keep wall street happy.  

Good luck to them.  As @chadbag points out if they focused more on entertaining and less on pontificating they probably wouldn't have near the growth problem.  Then again I should thank them for their BS - I'm saving a ton of money not subscribing to them  

Disney+ subscriber growth has been like this:



Netflix has been like:



There's a suggestion their recent woke stuff is affecting their bottom line:

https://nypost.com/2021/05/08/disney-goes-woke-with-new-anti-racist-agenda-for-employees/

It can result in lower quality content like Marvel Eternals, Captain Marvel etc but Netflix growth is slowing too. Every market gets saturated at some point. Families only need one subscription and these services are targeted more at the US audience. US population is over 300m but about 100m under 20 years old who wouldn't subscribe to Disney+ themselves. If we assume the other 200m+ share between male/female/partner in most cases (household), that puts the potential US subscriber limit at around 100m and that's if everybody subscribes, which is unlikely. Netflix has pretty much saturated the Western market:



The growth in subscriber volume would have to come from international markets so having content that represents more diverse groups could actually end up being beneficial, as long as it's good quality but certainly good quality content without political undertones sells well everywhere.

https://boundingintocomics.com/2021/11/16/marvel-studios-president-victoria-alonso-declares-diversity-and-inclusion-is-not-a-political-game-for-us/

But I don't think they necessarily need to keep growing subscriber volume. It's revenue that matters for a company in the end. Once they have the volume, which Disney already does, they need to make more money from them. That's the business model a lot of companies follow now like Snapchat, WhatsApp, Facebook, Google, free-to-play games with in-app purchases. First get the traffic and then figure out how to increase revenue per user. For streaming services, this means trying to move existing subscribers to higher priced subscriptions with premium content or bundles. This is what TV networks and cable providers do too with low priced offers for new users that gets bumped up after a year.

If Disney can persuade even a small percentage of Disney+/ESPN+ subscribers onto the much higher priced live tier, their revenue would grow by a lot. But it's easier to persuade people to pay more if they make good premium content and it's been proven that movies made with the aim of pushing some social movement don't sell or review that well because that's not what people watch movies for, they are for entertainment. They aren't mutually exclusive, it's possible to make good movies that are representative, the first Wonder Woman movie was extremely well made but then the second one went a bit too far in the wrong direction. They just need to find a good balance and it's good to have new characters, they've exhausted a lot of the existing MCU characters.

crowley

Marvin said:

docno42 said:

Marvin said:
I wouldn't describe 118 million paying subscribers as flagging. 

The vast bulk of those were from their initial launch.  Their growth has been flat for over six months now - they have hit a wall and hit it hard.   

Which is why they are desperate for a way to bulk up their subscription numbers to keep wall street happy.  

Good luck to them.  As @chadbag points out if they focused more on entertaining and less on pontificating they probably wouldn't have near the growth problem.  Then again I should thank them for their BS - I'm saving a ton of money not subscribing to them  

Disney+ subscriber growth has been like this:

There's something pretty messed up about that horizontal scale.  Not a credible chart.

marvin

crowley said:

Marvin said:

docno42 said:

Marvin said:
I wouldn't describe 118 million paying subscribers as flagging. 

The vast bulk of those were from their initial launch.  Their growth has been flat for over six months now - they have hit a wall and hit it hard.   

Which is why they are desperate for a way to bulk up their subscription numbers to keep wall street happy.  

Good luck to them.  As @chadbag points out if they focused more on entertaining and less on pontificating they probably wouldn't have near the growth problem.  Then again I should thank them for their BS - I'm saving a ton of money not subscribing to them  

Disney+ subscriber growth has been like this:

There's something pretty messed up about that horizontal scale.  Not a credible chart.

Those are the subscriber numbers by financial quarter, only the first point is off due to the launch, the rest are 3 month separations.

crowley

Marvin said:

crowley said:

Marvin said:

docno42 said:

Marvin said:
I wouldn't describe 118 million paying subscribers as flagging. 

The vast bulk of those were from their initial launch.  Their growth has been flat for over six months now - they have hit a wall and hit it hard.   

Which is why they are desperate for a way to bulk up their subscription numbers to keep wall street happy.  

Good luck to them.  As @chadbag points out if they focused more on entertaining and less on pontificating they probably wouldn't have near the growth problem.  Then again I should thank them for their BS - I'm saving a ton of money not subscribing to them  

Disney+ subscriber growth has been like this:

There's something pretty messed up about that horizontal scale.  Not a credible chart.

Those are the subscriber numbers by financial quarter, only the first point is off due to the launch, the rest are 3 month separations.

Jun 20 to Oct 20 isn't three months either.  The scale should be relatively adjusted.

marvin

crowley said:

Marvin said:

crowley said:

Marvin said:

docno42 said:

Marvin said:
I wouldn't describe 118 million paying subscribers as flagging. 

The vast bulk of those were from their initial launch.  Their growth has been flat for over six months now - they have hit a wall and hit it hard.   

Which is why they are desperate for a way to bulk up their subscription numbers to keep wall street happy.  

Good luck to them.  As @chadbag points out if they focused more on entertaining and less on pontificating they probably wouldn't have near the growth problem.  Then again I should thank them for their BS - I'm saving a ton of money not subscribing to them  

Disney+ subscriber growth has been like this:

There's something pretty messed up about that horizontal scale.  Not a credible chart.

Those are the subscriber numbers by financial quarter, only the first point is off due to the launch, the rest are 3 month separations.

Jun 20 to Oct 20 isn't three months either.  The scale should be relatively adjusted.

June 27th 2020 - October 3rd 2020 is roughly 3 months. They are fiscal quarters, the day of the month isn't the same in each month. Some graphs would use Q1, Q2 etc but it's useful to know the month to see where it was relative to the current date e.g Disney's fiscal Q1 2020 reports numbers for December 2019.

docno42

Marvin said:

If Disney can persuade even a small percentage of Disney+/ESPN+ subscribers onto the much higher priced live tier, their revenue would grow by a lot. But it's easier to persuade people to pay more if they make good premium content and it's been proven that movies made with the aim of pushing some social movement don't sell or review that well because that's not what people watch movies for, they are for entertainment. They aren't mutually exclusive, it's possible to make good movies that are representative, the first Wonder Woman movie was extremely well made but then the second one went a bit too far in the wrong direction. They just need to find a good balance and it's good to have new characters, they've exhausted a lot of the existing MCU characters.

Agreed.  You can incorporate social commentary into entertainment without hitting people over the head with it or deriding the audience.  The original Star Trek did that VERY well. 

But will they?  I hope so.  I hope the adults return to the room with these companies - not holding my breath in the meantime.  I would love to be pleasantly surprised.  Time will tell.