Disney raises ad-free Disney+ and Hulu to $21.49 a month each, making the bundle nearly half price

Disney is raising the monthly price of Disney+ and Hulu again. The ad-free version of each service goes to $21.49 a month, up $2.50 or 13%, and the ad-supported version of each rises 50 cents, or about 4%, to $12.49, The Hollywood Reporter reported. The ad-free Disney+ and Hulu bundle rises $2 to $21.99. Bloomberg first reported the increases, and 9to5Mac reported the new prices were already in effect on Wednesday.

The reports differ on one plan. The Hollywood Reporter said the ad-supported bundle rises 50 cents to $12.99; 9to5Mac said it stays at $12.99. Both put the new price at $12.99.

Disney shares were little changed at $103.87 at 1:56 p.m. ET, up 0.05%, according to Nasdaq.

The two gaps that matter

The headline number is 13%. The pricing is really about two gaps, and both got wider. These are our calculations from the reported prices:

The bundle gap. Buying both ad-free services separately now costs $42.98 a month. The bundle costs $21.99, a discount of about 49%. The bundle is only 50 cents more than one service on its own. The Hollywood Reporter noted that bundle subscribers tend to cancel less often. Priced like this, very few people have a reason to take just one service.

The ads gap. The monthly cost of skipping ads on a single service rose from $7 to $9. Over a year, that is $108 for no ads, up from $84. With the ad-free price rising five times as fast as the ad tier, the pricing nudges customers toward ads, and an ad-tier subscriber brings in advertising revenue on top of the fee. On the ad-free bundle, the yearly increase is $24.

Why it matters beyond the living room

A 13% increase is roughly four times the 3.4% annual CPI rate for August listed on our economic calendar. The Hollywood Reporter said streaming prices have risen about three times faster than overall inflation since 2022. With the Fed signaling more hikes, investors will be watching whether Disney loses subscribers when it next reports.

For comparison, The Hollywood Reporter put Netflix's premium plan at $26.99 a month, still the most expensive single streaming subscription and $4 more than HBO Max's top tier.

Sources: The Hollywood Reporter; 9to5Mac; Bloomberg and Reuters reports; Nasdaq quote for DIS. Percentage and annual figures are our calculations. This is market information, not investment advice.