It’s official. The ad-free tier for Disney+ is going up from $10.99 a month to $13.99 per month. Hulu’s ad-free tier will increase in price from $14.99 to $17.99. The decision comes after Disney CEO Bob Iger confessed a few months ago that the Mouse House had underpriced its streaming offering in its quest for subscriber growth.

Insider previously reported on this as the “Netflix effect.” 

“Streaming services have been underpriced in the name of attracting critical mass. That’s offered a great deal for consumers […] I used to spend $15 to buy a single album on CD — often just to get access to one song. Now, I can pay $11 a month for Spotify and listen to hours of whatever I want wherever I want. I also used to have to buy cinema tickets for my whole family to go see “Encanto.” Now, I can watch it on demand for $13 a month, and also watch “Only Murders in the Building” on Hulu […] Sorry to break it to you, but that era is over. Spotify loses money offering that great deal. Disney loses money in streaming offering that great deal. Prices have to go up.”

Similarly to Netflix and Spotify, Disney reported smaller than expected losses in streaming last quarter, and has committed to getting the streaming business to profitability by 2024. 

If we want to be entertained all the time, we must pay the price. 

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