Disney Temporarily Cuts Hulu + Live TV Price 29% as Charter Carriage Dispute Drags On

Disney-owned Hulu Sept. 8 announced it was cutting the monthly subscription fee to ad-supported Hulu + Live TV by 29% to $49.99, effective immediately for new and returning subscribers through Oct. 11.

The move comes as Disney and the nation’s No. 2 cable operator, Charter Communications, continue their public carriage dispute that has resulted in Charter’s 14.7 million pay-TV subscribers losing access to ESPN, ABC and other Disney channels — a situation made more acute for subscribers wanting to watch college football, the NFL, and the U.S. Open tennis tournament, among other marquee events.

The Hulu + Live TV subscription provides viewers the ability to stream more than 90 TV channels, including ESPN, and others featuring live sports, national and local news and entertainment. Plus, subscribers have access to  Hulu’s entire on-demand streaming content library, originals, next-day network TV shows, access to Disney+ and ESPN+, and features such as unlimited DVR.

Charter contends Disney is mandating exorbitant carriage fee price hikes at a time when legacy pay-TV continues to hemorrhage subscribers to streaming video services, including Disney+, ESPN+, Hulu and Netflix.

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In a Sept. 4 statement, Charter said that this year alone it was expected to pay Disney more than $2.2 billion for “just the right to carry [branded] content,” while ignoring the ongoing impact of a softening advertising market. Commercials, along with subscription fees, is how Charter, and other pay-TV operators, pay carriage fees to content holders.

The promotion ends ahead of Disney’s previously-announced plans to increase costs for most of its direct-to-consumer services, including Hulu + Live TV. The platform with 4.7 million subscribers is upping the monthly fee for ad-supported access to $76.99, and the ad-free plan is going from $82.99 to $89.99 per month.

Disney+ Drops Ad-Supported Basic Monthly Price to $1.99, Touts Hulu + Live TV As Charter Spectrum Carriage Dispute Continues

Disney+ is offering its ad-supported basic tier option to new subscribers for $1.99 monthly through Sept. 20 — down from its normal $7.99 fee. Thereafter, the promotional fee reverts back to the standard price until canceled. Disney is also pushing its $9.99 Bundle Duo Basic package, which includes ad-supported versions of Disney+ and ESPN+.

Although not mentioned, the promotion comes as the Walt Disney Co. remains embroiled in a carriage distribution dispute with Charter Communications, which operates the Spectrum pay-TV platform with 14.7 million subscribers — the second-largest cable TV operator in the country.

Last week, Spectrum subscribers lost access to Disney-owned ESPN and ABC, among other channels, days before the start of the 2023 college football season. The NFL begins its new season Sept. 7.

Charter claims Disney is asking for more to carry its programming, while continuing to aggressively market its direct-to-consumer streaming options. Charter, which is paying Disney more than $2 billion this year in carriage fees, is also asking Disney to offer its subs free access to ad-supported versions of Disney+, ESPN+ and Hulu.

Earlier this week, Disney urged affected Charter subscribers to sign up for its Hulu + Live TV platform, which ended the most-recent fiscal period with 4.3 million subscribers. Disney is offering the ad-supported online TV service, along with ad-supported versions of ESPN+ and Disney+ for $69.99 monthly until Oct. 12, when the bundle increases its price to $76.99.

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The dispute comes as both Disney and Charter face ongoing subscriber losses across both direct-to-consumer and legacy pay-TV markets. Disney+ saw 300,000 North America subscribers drop the service in its most-recent fiscal period. Spectrum lost 789,000 pay-TV subs year-over-year for the 90-day fiscal period ended June 30.

Amazon’s Prime Video Tops Customer Satisfaction Ranking

Amazon’s Prime Video streaming service ranked first place among video streaming services in a new customer satisfaction study by the American Customer Satisfaction Index.

Prime Video posted a customer satisfaction score of 80 (out of 100), an 8% jump from last year, displacing Disney+ for the top spot. Disney+ fell 3% this year, placing it in the industry’s bottom three.

Peacock moved into second place following a 10% increase to 79.

Netflix (up 5%) tied for third place, alongside Hulu (up 4%), Paramount+ (up 1%) and ACSI newcomer YouTube Premium at a score of 78.

HBO Max, now relaunched as Max, scored 77 (up 5%), followed by Apple TV+ (up 10%) and Disney+, both at 76. ESPN+ sat near the bottom of the industry after slipping 1% to 72, but Crackle finished last despite improving 1% to 70.

Meanwhile, Hulu + Live TV debuted atop the live TV apps with an ACSI score of 80. Sling TV (up 6%) and YouTube TV (down 1%) both scored 76, while DirecTV Stream stumbled 5% to a score of 72.

The video streaming industry, which includes both streaming apps (77) and live TV apps (76), improved 4% to an ACSI score of 77. The smaller group of streaming and live TV apps overall dipped 4% to 75.

Meanwhile, the performance quality and offerings of streaming services all increased in customer satisfaction, including the number of and availability of TV shows and movies.

Disney Pays $900 Million for Final BAMTech Ownership Stake

One of the last corporate decisions made by ousted Disney CEO Bob Chapek made was paying $900 million to Major League Baseball for the remaining 15% stake in BAMTech, the backend IT company that powers Disney+, ESPN+ and Hulu, among other digital properties.

Disney disclosed the purchase in its annual 10K filing for the fiscal period ended Oct. 1.

The deal makes Disney 100% owner of the erstwhile Major League Baseball Advanced Media property spun off by MLB in 2015. In 2016, Disney, under the direction of former (now reinstated) CEO Bob Iger, acquired a 33% ownership in BAMTech for $1 billion, upping the stake to 75% a year later for another $1.5 billion as the company made plans for the launches of Disney+ and ESPN+. Last year, Disney paid the National Hockey League $350 million for its 10% ownership in BAMTech.

The transaction comes after Disney reported a $1.5 billion quarterly operating loss for its direct-to-consumer business unit. The unit lost more than $4 billion in the fiscal year. Notably, in the regulatory filing, Disney valued MLB’s stake in BAMTech at $828 million.

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Hulu Upping Monthly Ad-Free Subscription Fee to $14.99

Hulu Sept. 6 announced it will increase the price of its ad-free subscription streaming video service by $2 to $14.99 per month, beginning Oct. 10. The price hike comes about a year after the platform raised the price of the ad-free tier by $1 to $12.99. The price for the ad-supported tier increased by $1 to $7.99 monthly in August.

Hulu’s ad-free price hike matches the ad-free tier price for both Amazon Prime Video (with Prime membership) and HBO Max — heretofore the most-expensive SVOD platforms.

The change follows a $2 price hike for Disney+ (from $7.99 to $9.99) and a $3 monthly upcharge for ESPN+ ($6.99 to $9.99) announced in August.

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Hulu reported 42.2 million SVOD subscribers in the most-recent fiscal period, ended July 2. When including online TV platform Hulu + Live TV, the Hulu brand has a combined 46.2 million subs.

Disney+ Tops 152.1 Million Q3 Subs; Ad-Supported Tier Launching Dec. 8 Along With Platform Price Hikes

The Walt Disney Co. on Aug. 10 announced that its branded Disney+ subscription streaming service completed the studio’s third third quarter (ended July 2) with 152.1 million subscribers worldwide. That represents a 31% increase from 116 million subs at the end of the previous-year period. The platform added 14.4 million subs since the end of Q2 on April 2.

Disney’s pending ad-supported Disney+ subscription offering is set to launch on Dec. 8, priced at $7.99 per month. The ad-free subscription tier is increasing to $10.99 monthly, up $3. Hulu will also see a price hike to $7.99 from $6.99, with the ad-free option rising to $14.99 from the current $12.99.

Again, much of the platform’s foreign subscriber growth originated in India through Disney’s Hotstar streaming platform. The platform helped Disney add 13.5 million subs to 58.4 million from 44.9 million last year.

Disney+ added 6.6 million North American subs to end the period with 44.5 million from 37.9 million at the end of Q3 2021. International sub growth, excluding India, grew 48% to 49.2 million from 33.2 million last year.

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International subscribers now account for 107.6 million, or almost 71% of the Disney+ subscriber base.

When combined with 22.8 million ESPN+ subs (up 53% year-over-year), plus Hulu’s 42.2 million (up 8%) and four million Hulu with Live TV subs (up 8%), Disney ended Q3 with 221 million total streaming subscribers.

Disney expects to generate 135 million to 165 million core Disney+ subs by end of fiscal-year 2024, with non-Hotstar subscribers accounting for 60% to 70% of the projected 230 million to 260 million overall subscribers. Disney is now upping its guidance for Disney+ Hotstar subs to 80 million by the end of fiscal year 2024.

Meanwhile, as Disney ups its direct-to-consumer streaming footprint, so too do the segment’s expenses. The DTC segment ended the quarter with more than $1.1 billion in operating losses on revenue of $5 billion. That compared with an operating loss of $293 million on revenue of $4.2 billion in the previous-year period as the platform ramps up content spending and worldwide distribution.

Disney expects the unit’s operating loss to peak in the current fiscal quarter before transitioning toward operating income over the next two years.

“We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms and unique immersive physical experiences that exceed guest expectations, all of which are reflected in our strong operating results this quarter,” CEO Bob Chapek said in a statement.

Disney/Hulu Switch Course, Will Allow Political Issue Advertising

The Walt Disney Company has reversed a policy not allowing politically-themed advertising on Hulu or Hulu + Live TV. The move comes after Democrat political ads targeting Republicans on gun control and abortion were banned from the platforms.

“After a thorough review of ad policies across its linear networks and streaming platforms over the last few months, Disney is now aligning Hulu’s political advertising policies to be consistent with the company’s general entertainment and sports cable networks and ESPN+,” Disney said in a statement. “Hulu will now accept candidate and issue advertisements covering a wide spectrum of policy positions, but reserves the right to request edits or alternative creative, in alignment with industry standards.”

Hulu and Hulu + Live TV, which ended the most-recent fiscal quarter with 41.4 million and 4.1 million subscribers, respectively, had found itself in the the middle of a social media backlash with the hashtag #BoycottHulu gaining strength.

“Hulu’s censorship of the truth is outrageous and offensive,” the Democratic Congressional Campaign Committee posted on Twitter July 25. “Voters have the right to know the facts about MAGA Republicans’ extreme agenda on abortion — Hulu is doing a huge disservice to the American people.”

Regardless, Disney has already announced that it will not accept any political ads, marketing of alcohol products or streaming rivals on the pending Disney+ ad-supported plan.

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Disney+ Adds 7.9 Million Q2 Subs, Reaches 138 Million Globally

The Walt Disney Co. May 11 said it added 7.9 million Disney+ subscribers in the second quarter (ended April 2). The streamer ended the period with almost 138 million subscribers worldwide, which includes 50.1 Hotstar subscribers in India.

The streamer, combined with ESPN+ and Hulu and Hulu + Live TV, brings Disney’s direct-to-consumer bundle to almost 206 million subs, up from 196.4 million during the previous-year period.

Specifically, Disney+ added 7.1 million North American subs, to bring the region’s total to 44.4 million, up from 37.3 million in the previous-year period. Internationally (excluding Hotstar), Disney+ added 12.1 million subs to bring its overseas base to 43.2 million, compared with 31.1 million a year ago.

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ESPN+ added 9 million subs to reach 22.8 million, up from 13.8 million last year. Hulu ended the quarter with 41.4 million subs, up from 32.8 million subs in the prior-year period. Hulu + Live TV, Disney’s online TV streaming platform, finished the quarter with 4.1 million subs, up from 3.8 million subs a year ago.

“Our strong results in the second quarter … once again proved that we are in a league of our own,” CEO Bob Chapek said in a statement. “Quite simply, we believe Disney+ is one-of-a-kind streaming service.”

At the same time, direct-to-consumer business increases also result in increased costs. Segment revenue for the quarter increased 23% to $4.9 billion, and operating loss increased $600 million to $900 million. The increase in operating loss was due to higher losses at Disney+ and ESPN+ and lower operating income at Hulu.

Lower results at Disney+ reflected higher programming and production, marketing and technology costs, partially offset by an increase in subscription revenue. Higher subscription revenue was due to subscriber growth and increases in retail pricing. The increases in costs and subscribers reflected growth in existing markets and, to a lesser extent, expansion to new markets.

Lower results at ESPN+ were due to higher sports programming costs and a decrease in income from Ultimate Fighting Championship (UFC) pay-per-view events, partially offset by an increase in subscription revenue due to subscriber growth. Lower UFC pay-per-view income was due to a decrease in average buys per event.

The decrease at Hulu was due to higher programming and production, marketing and technology costs, partially offset by subscription revenue growth and higher advertising revenue. The increase in programming and production costs was primarily due to higher subscriber-based fees for programming the live-TV service due to the carriage of more networks, an increase in the number of subscribers and rate increases. Subscription revenue growth was due to an increase in subscribers and higher average rates, primarily due to increases in retail pricing. The increase in advertising revenue was due to higher rates and impressions.

Hulu + Live TV Adding Unlimited DVR

Hulu April 13 will introduce unlimited DVR to all Hulu + Live TV subscribers at no additional cost.

The upcoming launch follows the addition of access to Disney+ and ESPN+ as part of a Hulu + Live TV subscription.

“Hulu + Live TV is becoming even more valuable and attractive to consumers,” Joe Earley, president of Hulu, said in a statement. “Through one single subscription, users get access to 80-plus live channels — including all the major broadcast networks — as well as Hulu, Disney+, ESPN+, and soon Unlimited DVR. Guided by our relentless focus on delivering the consumer a high-quality user experience, we will be one of the only pay-TV providers — traditional or streaming — to offer this feature as part of the base plan at no additional cost.”

Unlimited DVR will allow on-demand playback and fast-forwarding capabilities on recordings for up to nine months. To date, Hulu + Live TV subscribers each received up to 50 hours of DVR storage, with an add-on option to upgrade to up to 200 hours for an additional monthly fee. Subscribers who previously purchased the Enhanced Cloud DVR add-on for $9.99 per month or Enhanced Cloud DVR + Unlimited Screens bundle add-on for $14.98 per month will transition to Unlimited DVR on April 13 and see a reduction in their monthly bills. New subscribers and existing subscribers that did not purchase any add-ons will automatically receive unlimited DVR as part of their Hulu + Live TV subscription at no additional cost.

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In addition to access to 80-plus live channels as well as Disney+ and ESPN+, Hulu + Live TV includes next-day network TV shows, originals and a library of on-­demand hit TV episodes and movies. With 4.3 million subscribers, Hulu + Live TV remains one of the largest DMVPDs in the United States, according to the service.

CFO: Bundling, India Drove Disney+ Q1 Sub Growth

With the Disney+ streaming service adding an impressive 11.7 million subscribers in the first quarter of 2022 (ended Jan. 1) from the fourth quarter of 2021 (ended Oct. 2, 2021), CFO Christine McCarthy, speaking on the media giant’s fiscal call, said the growth came from a variety of sources.

Specifically, the platform resumed paid subscriber acquisitions in India following a slowdown in Q4 when the company had to market directly with expired subs to get them to renew — as mandated by local law. Disney + Hotstar added 2.6 million paid subscribers to finish the period with 45.9 million.

Much of that growth is driven by Hotstar’s rights to the Indian Premier League cricket competition and significant collection of local content, including the addition of 18,000 hours of original programming anually. With renewal of rights coming up, Disney remains confident it can reach from 230 million to 260 million Disney+ subs by the end of fiscal 2024.

“That local content we’re developing really will mitigate the impact on us if we were not to win the [rights] auction on IPL,” McCarthy said.

Meanwhile, Disney’s new bundling strategy combining the SVOD and ESPN+ with the Hulu online TV option generated 2 million new subscribers. The platform also added 5.1 million international subs (outside of India) driven by growth in Asia Pacific and European markets. In the quarter, Disney+ launched operations in South Korea, Taiwan and Hong Kong.

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By comparison, Netflix increased Asia Pacific paid memberships by 2.6 million with strong growth in both Japan and India. It added 1.2 million North American subs — for a total of 8.3 million additions worldwide.

“Overall, we are pleased with Disney+ subscriber growth in the quarter and are looking forward to new market launches and a strong content slate later this year,” McCarthy said. “We don’t anticipate that subscriber growth will necessarily be linear from quarter-to-quarter, and we continue to expect growth in the back half of the fiscal year to exceed growth in the first half.”