Disney hikes Disney+ ad-free subscription cost by 38%

Disney said Wednesday it is raising prices for streaming subscribers in the U.S. who want to watch Disney+ without ads, as more viewers switch to what CEO Bob Chapek described Wednesday as the “best value in streaming.”

The price increases are tied to a new tiered service Disney will launch in December for U.S. subscribers. The basic Disney+ service today costs $7.99 per month. Starting in December, that basic service will run ads, so a subscriber who wants no ads will have to upgrade to a premium service that starts at $10.99 per month, a 37.5% rise over current prices. An annual plan will cost $109.99.

Netflix’s most popular streaming plan in the U.S. is now $15.50 per month, and its top-of-the-line plan is $20 per month. That follows several rate hikes to help pay for its original programming, which has become even more important since Disney pulled its programming and classic movies from Netflix after a licensing agreements between the companies expired.

Disney said it added 14.4 million subscribers to its Disney+ streaming service in the April-June fiscal quarter. In total, subscribers to all Disney streaming services, which include Hulu and ESPN+, amounted to about 221 million, putting the entertainment giant slightly ahead of Netflix in the streaming wars.

Netflix ended June with 220.7 million subscribers after losing nearly 1 million subscribers in the past quarter.

Disney's growing streaming sales combined with a recovering theme park business after pandemic-era shutdowns led the Burbank, California-based entertainment giant to beat Wall Street expectations with quarterly earnings Wednesday.

Disney reported revenue of $21.5 billion in the three months through July 2, up 26% from the same time last year.

Earnings per share came to $1.09 when excluding certain...