During Disney’s Q2 earnings call on Wednesday, Bob Iger, CEO of the Walt Disney Company, announced that Disney will form a “one-app experience” in the US, incorporating Hulu content and Disney+ into a combined streaming platform; the two will remain standalone services, however.
“While we continue to offer Disney plus Hulu and ESPN plus as standalone options, this is a logical progression of our DTC [direct-to-consumer] offerings that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger stated.
With this change, subscribers of both Hulu and Disney+ will have the ability to use a single application as opposed to two applications, creating a better overall experience for subscribers.
During the earnings call, Iger also announced that the ad-free plan for Disney+ will increase; it currently costs $10.99 per month. Information regarding the exact cost of increase was not revealed. Iger doesn’t expect to raise the cost of its ad-supported tier.
Disney recently raised its prices for both Disney+ and Hulu last year and introduced an ad-supported tier for Disney+. Iger commented that the company sees its ad-supported option as another way for its streaming business to reach profitability.
Although it was announced that Disney+ lost 4 million subscribers in the second quarter, Iger insisted rising subscription prices weren’t the cause.
Disney will roll out the one-app experience by the end of the calendar year and share further details in the future, according to Iger.
This information comes as reports discussed that Disney is determining whether to purchase the remaining stake of Hulu. Disney currently owns 66% of Hulu, while Comcast owns the remaining.
In 2019, Disney and Comcast reached an agreement that would allow Disney to purchase Comcast’s stake. In the agreement, both companies agreed that Hulu would have a guaranteed minimum total equity value of $27.5 billion. That makes Comcast’s stake worth about $9.2 billion.