It’s been rumored for some time, and today Disney CEO Bob Iger confirmed that when Disney+ launches in November, subscribers will be able to bundle Disney+, ESPN+, and the basic tier of Hulu for $12.99 per month, representing a $5 discount when compared to getting all three individually.
Deadline summed up Iger’s comments here, but this is the relevant bundle information:
Following through on its promises to offer a bundle of its streaming services, Disney confirmed it will roll out a bundle of Disney+, Hulu’s basic on-demand tier and ESPN+ for $12.99 a month.
The pricing is identical to the rate for the most popular Netflix subscription. The bundle will offer a $5 discount from the cost of subscribing to the platforms individually. It also adds a live sports element to a bundle package, which will enable cord-shavers and others re-examining their pay-TV docket one more option. It takes effect with the launch of Disney+ on November 12.
Iger’s confirmation came after Disney released what amounted to disappointing earnings, missing market the market forecast for the quarter and leading to a stock price hit.
The company’s Studio Entertainment segment reported revenues of $3.8 billion during the quarter, representing a 33% increase from the same period one year ago.
Disney’s Media Networks unit reported revenue of $6.7 billion, which is a 21% rise from the same quarter one year earlier. The company’s Parks unit posted revenue of $6.6 billion during the quarter, marking a 7% rise from the third quarter of 2018.
The direct-to-consumer segment saw revenue of $3.86 billion during the period, with operating losses increasing to $553 million from $168 million. The company blamed the increased losses on Hulu and increased investments in ESPN+ and Disney+ streaming services.
The streaming group posted more operating losses, which is to be expected; ESPN+ may be doing well, but Disney is clearly gearing up for the launch of Disney+ in a few months, at which point they likely expect things to turn around.
Disney’s main defense of earnings coming up short: blaming Fox, the assets of which Disney is now responsible for, whether or not they had a hand in making films like, say, Dark Phoenix.
The film business reported revenue of $3.84 billion, with operating income of $792 million, well lower than expectations for record-breaking film profit after the release of the Marvel movie “Avengers: Endgame” in the quarter, as well as the opening of “Toy Story 4.” Chief Financial Officer Christine McCarthy said that Fox’s disappointing X-Men film “Dark Phoenix” led to the new movie studio recording an operating loss of $170 million, after 21st Century Fox’s movie studio produced operating profit of $180 million in the year-ago quarter. Analysts on average expected Disney’s movie business to report operating income of $1.09 billion on sales of $4.37 billion, according to FactSet.
The bundled pricing news, though, is the big one. ESPN+ isn’t a total ESPN replacement, but considering Disney+ is probably going to appeal to an entirely new group of viewers, having the ability to tack on ESPN+ and a basic Hulu subscription could be a great way to pump up the ESPN+ subscriber base even further. And at $12.99 per month, it’s priced at a tier very competitive with Netflix, while offering a large chunk of Disney’s library, upcoming original content, live sports, and on-demand viewing of current shows via Hulu.
That streaming section on the earnings reports is probably going to look a lot different in the very near future.