The Walt Disney Company will raise the price of ad-free Disney+ subscriptions this year while adding Hulu content to the Disney+ streaming service and removing some shows from streaming entirely, executives announced Wednesday. Disney DIS, -1.02% executives are changing their streaming strategy to lose less money by offering its content directly to consumers over the Internet. The company launched an ad-supported version of Disney+ in the US and other countries late last year, and at the same time raised the price of its ad-free offering, while raising the cost of other services. “The pricing changes we’ve already implemented have proven successful, and we plan to set higher prices for our ad-free tiers later this year to better reflect the value of our content offerings,” Chief Executive Robert Iger said in a conference call Wednesday. Making a plan.” Related to Disney’s quarterly earnings. “As we look to the future, we will continue to optimize our pricing model to reward loyalty and reduce churn, increase subscriber revenue for premium ad-free tiers, and drive growth for subscribers who offer a lower-cost ad-supported option.” Full earnings coverage: Disney stock falls as Disney+ subscribers decline amid pressure to lose less money in streaming Iger returned as Disney’s chief executive late last year and has been evaluating Disney’s streaming strategy. One of the biggest question marks is Hulu, of which Disney now owns two-thirds, with an option to buy the remaining interest from Comcast Corp. CMCSA, +0.61% as early as January. Iger, however, is rethinking the path to Hulu after returning. In an interview with CNBC earlier this year, he hinted that Disney may choose to sell the streaming service instead of buying the remaining interest. In his first big move with the service since returning, Iger said Wednesday that Hulu content will roll into Disney+ in the US later this year. “As an important step toward building a growth business, I’m pleased to announce that we will soon begin offering a native one-app experience that incorporates our Hulu content through Disney+,” Iger said on the conference call. “While we will continue to offer Disney+, Hulu and ESPN+ as standalone options, this is our logical progression. [direct-to-consumer] Offerings that bundle will provide more opportunities for advertisers while giving subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately a more unified streaming experience. For more: Disney is going through a ‘drastic evolution’ in streaming, and more changes could be coming Netflix Inc. After a wave of new streaming services appeared in recent years to compete with NFLX, +0.99% , media companies are looking to combine some of their offerings as consumers deal with a web of potential subscriptions. Paramount Global PARA, -4.11% plans to combine its Paramount+ and Showtime streaming services, and Warner Bros. Discovery WBD, -2.76% plans to combine HBO Max with Discovery+ while renaming the service Max. When an analyst on Wednesday’s call suggested that Disney’s move indicated that Iger had decided to buy the rest of Hulu, Iger responded by saying that “it’s really not fully determined what will happen in that regard.” “Where we’re going is for an experience that will have general entertainment and Disney+ content together for the reasons I just described,” Iger said. “How that ultimately unfolds is somewhat in the hands of Comcast and basically in the hands of the conversations or negotiations that we have. I don’t want to make any predictions in terms of when or how that ends up. Adding Hulu content to Disney+ Meanwhile, Disney will also remove some content from its streaming services, which will allow the company to save money that would otherwise be paid as residuals to air content. Warner Bros. Discovery took similar steps last year to cut costs for its HBO Max streaming service. “We will remove certain content from our streaming platforms, and currently expect to take an impairment charge of approximately $1.5 billion to $1.8 billion,” Chief Financial Officer Christine McCarthy said in a conference call, without elaborating. For more: As streaming services cut costs, TV shows — and residuals — disappear Iger expanded on his vision for streaming in his second earnings report since returning to the company, and laid out his general thoughts on the way forward for Disney’s streaming portfolio — which also includes ESPN+ and Disney+ versions in India and other parts of Asia. As Disney+Hotstar. “First, it is important that we rationalize the amount of content that we create, and what we are spending to create our content. Second, our legacy platforms enable us to expand our audience and often increase our potential streaming success, while at the same time, allowing us to amortize our content costs over multiple windows,” he said. There is also a need to strike the right balance between programming as well as our platform and programmatic marketing. Finally, we must continue to calibrate our investments to specific markets.” Disney shares fell in after-hours trading on Wednesday following the release of quarterly results, which showed a gradual decline in Disney+ subscribers. The stock is up 16.4% so far this year, as the S&P 500 index SPX, +0.45% has gained 7.3%.
