Discovery+ has announced a price increase for its ad-free subscription, raising it from $6.99 to $8.99, a 28% hike. This move comes as streaming services are under pressure to meet Wall Street's profitability expectations by next year. The price increase also applies to Canada, with the ad-free tier rising to CN$5.99. However, the "ad-lite" ad-supported tier will remain unchanged at $4.99 in the United States.
Netflix is also planning to raise the price of its ad-free tier in the coming months following the settlement of the SAG-AFTRA strike. Talks between Netflix and actors' unions are set to resume, and optimism for a settlement is rising after the resolution of the Writers Guild of America strike.
Other streaming services, including Hulu and Disney+, have recently raised the prices of their ad-free offerings. Hulu now costs $17.99 per month for the ad-free tier, while Disney+ costs $13.99.
Discovery+ primarily features unscripted reality TV shows and is part of Warner Bros. Discovery's Max service, which includes programming from HBO, DC, CNN, and other media entities. Max's least expensive ad-free tier now costs $15.99.
To balance profitability, streaming services are launching ad-supported lower-cost subscription tiers while raising prices on their ad-free options. Additionally, they are reducing the amount of available programming, canceling lightly viewed shows, and ordering fewer original programs to save costs.
In order to provide more value to customers, services like Max are offering additional features such as a feed of CNN live programming and sports programming add-ons. Apple TV+ has also introduced an add-on for Major League Soccer games, which gained popularity after the addition of Lionel Messi to the Miami franchise.
Furthermore, streaming services like Netflix are expanding into consumer products and merchandise tied to their popular franchises. This strategy has been successful for studios like Disney and Warner Bros., which generate significant revenue from product spinoffs of franchises like Marvel and Star Wars.
Overall, streaming services are facing the challenge of balancing profitability with customer expectations and competition. Price increases, content adjustments, and additional features are part of their strategies to achieve long-term success in the highly competitive streaming industry.