The price of Disney's sports streaming service is going to go up.
The new price was $7 per month. On August 23, the increase will take effect. An annual subscription to the sports network will increase in price.
It is unusual for the price of a streaming service to go up more than 40% in a single day. In the last two years, Disney has only raised the price of its sports network by $1 a month.
Disney achieved several goals with the rate hike. If customers stick with the service, it will help Disney boost revenue for its streaming products, which still lose money.
There are a lot of new and valuable content on the service, including live National Football League games, exclusive grand slam tennis matches from Wimbledon and the Australian Open, and National Hockey League games. Disney's most recent renewal of Monday Night Football cost the company over $2 billion a year. Disney has the right to show Monday Night Football on Disney's cable channel.
Disney isn't changing the price of its bundle, which will stay at 13 bucks per month. Disney+ is a part of it.
Disney wants to have 260 million Disney+ subscribers by the end of the decade. Disney had 138.7 million global Disney+ subscribers at the end of last quarter.
While Disney doesn't break out how many of the more than 22 million ESPN+ subscribers are paying for it through the bundle, narrowing the price difference between only paying for ESPN+ and paying for all three Disney streaming services should move some of them towards the bundle. Increasing the aggregate Disney+ number will allow Disney to hit its target.
Disney's top priority is hitting that mark. Disney shares tend to trade on Disney+ subscription numbers. The contract with Disney was renewed in July.
In the past year, Disney has moved more exclusive live games to the service. The NHL.TV out-of-market package and the PGA Tour Live are now included in the ESPN+ package.
All Monday Night Football games and many National Basketball Association games that aren't yet available on ESPN+ are replicas of the network that broadcasts them. Millions of Americans abandon traditional pay-TV in favor of the ESPN cable channel, but it still takes in billions of dollars for Disney.
Former Disney CEO and Chairman Bob Iger told CNBC in December that being in the sports space is still very valuable. Do you try to accelerate it or do you hold back for as long as possible? I believe the future of ESPN is bright if it can migrate to the new platforms successfully.
The Disney stock rose in the afternoon.
Former Disney CEO Iger said that the future of ESPN is bright if it can migrate in digital transformation.
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