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Warner Bros. Discovery's (WBD) Discovery+ Announces Price Hike
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Warner Bros. Discovery (WBD - Free Report) announced that it is raising the cost of a new ad-free monthly subscription for Discovery+ in the United States and Canada. From Oct 3, the price of the monthly subscription increased from $6.99 to $8.99, with applicable taxes. However, the ad-lite subscription has been unchanged at $4.99 per month.
In Canada, the price of a new ad-free monthly subscription for Discovery+ increased from CAD $6.99 to CAD $8.99. The cost of a new ad-lite subscription also increased from CAD $4.99 to CAD $5.99.
Existing subscribers will experience the price increase in their monthly billing cycle on or after Nov 2.
This is the first time that Discovery+ has raised the monthly subscriptions in these regions since its launch in January 2021. This adjustment enables the provider to consistently deliver compelling content across various genres, such as food, home, relationships, true crime and the paranormal.
Streaming Giants Increase Subscription Rates to Meet Production Costs
In recent years, the streaming TV has become increasingly competitive, leading Hollywood companies to invest billions in creating its own streaming platforms and content libraries in order to compete with Netflix (NFLX - Free Report) .
Consequently, the cost of participating in the streaming era has steadily risen. Streaming companies are finding it difficult to balance between making money and content spending to aid subscriber growth. Streaming giants have already increased their prices and are looking for other ways, such as merchandising and providing ad-supported tiers, to boost revenues.
Netflix has raised its subscription prices several times since its launch. Netflix raised its prices in January 2022 and has put restrictions on password sharing. Individuals who previously used streaming accounts paid by people living in different households are now required to have their own subscriptions. This change originated with NFLX, which no longer permits subscribers to share their accounts with individuals who do not reside in the same household.
Disney’s (DIS - Free Report) streaming platforms, such as Disney+, Hulu and ESPN+, have also become more expensive as DIS has focused more on streaming. Disney is set to increase the prices of its ad-free versions of Disney+ and Hulu once again, starting Oct 12. Disney+ will be priced at $13.99 per month and Hulu's no-ads tier will be available for $17.99 per month. The ad-supported tiers of both services will continue to be priced at $7.99 for the time being.
Paramount’s (PARA - Free Report) online streaming service provider, Paramount+, has also increased its monthly charges like other platforms in the online streaming market. On Jun 27, Paramount+ implemented a price hike coinciding with the launch of Paramount+ with Showtime integration. This change raised the cost of the current ad-supported essential plan from $4.99 to $5.99 per month and the premium plan increased from $9.99 to $11.99 per month, now including Showtime as part of the premium offering.
Warner Bros. Discovery is set to follow the steps of other streaming services by putting a stop on password sharing. This will boost direct-to-consumer (DTC) subscribers as well as revenues in the upcoming quarters.
The Zacks Consensus Estimate for WBD’s 2023 total DTC subscribers is pegged at 96,562, indicating year-over-year growth of 0.48%. The Zacks Consensus Estimate for revenues is pegged at $41.94 billion, indicating year-over-year growth of 24.01%.
Image: Shutterstock
Warner Bros. Discovery's (WBD) Discovery+ Announces Price Hike
Warner Bros. Discovery (WBD - Free Report) announced that it is raising the cost of a new ad-free monthly subscription for Discovery+ in the United States and Canada. From Oct 3, the price of the monthly subscription increased from $6.99 to $8.99, with applicable taxes. However, the ad-lite subscription has been unchanged at $4.99 per month.
In Canada, the price of a new ad-free monthly subscription for Discovery+ increased from CAD $6.99 to CAD $8.99. The cost of a new ad-lite subscription also increased from CAD $4.99 to CAD $5.99.
Existing subscribers will experience the price increase in their monthly billing cycle on or after Nov 2.
This is the first time that Discovery+ has raised the monthly subscriptions in these regions since its launch in January 2021. This adjustment enables the provider to consistently deliver compelling content across various genres, such as food, home, relationships, true crime and the paranormal.
Warner Bros. Discovery, Inc. Price and Consensus
Warner Bros. Discovery, Inc. price-consensus-chart | Warner Bros. Discovery, Inc. Quote
Streaming Giants Increase Subscription Rates to Meet Production Costs
In recent years, the streaming TV has become increasingly competitive, leading Hollywood companies to invest billions in creating its own streaming platforms and content libraries in order to compete with Netflix (NFLX - Free Report) .
Consequently, the cost of participating in the streaming era has steadily risen. Streaming companies are finding it difficult to balance between making money and content spending to aid subscriber growth. Streaming giants have already increased their prices and are looking for other ways, such as merchandising and providing ad-supported tiers, to boost revenues.
Netflix has raised its subscription prices several times since its launch. Netflix raised its prices in January 2022 and has put restrictions on password sharing. Individuals who previously used streaming accounts paid by people living in different households are now required to have their own subscriptions. This change originated with NFLX, which no longer permits subscribers to share their accounts with individuals who do not reside in the same household.
Disney’s (DIS - Free Report) streaming platforms, such as Disney+, Hulu and ESPN+, have also become more expensive as DIS has focused more on streaming. Disney is set to increase the prices of its ad-free versions of Disney+ and Hulu once again, starting Oct 12. Disney+ will be priced at $13.99 per month and Hulu's no-ads tier will be available for $17.99 per month. The ad-supported tiers of both services will continue to be priced at $7.99 for the time being.
Paramount’s (PARA - Free Report) online streaming service provider, Paramount+, has also increased its monthly charges like other platforms in the online streaming market. On Jun 27, Paramount+ implemented a price hike coinciding with the launch of Paramount+ with Showtime integration. This change raised the cost of the current ad-supported essential plan from $4.99 to $5.99 per month and the premium plan increased from $9.99 to $11.99 per month, now including Showtime as part of the premium offering.
Warner Bros. Discovery is set to follow the steps of other streaming services by putting a stop on password sharing. This will boost direct-to-consumer (DTC) subscribers as well as revenues in the upcoming quarters.
The Zacks Consensus Estimate for WBD’s 2023 total DTC subscribers is pegged at 96,562, indicating year-over-year growth of 0.48%. The Zacks Consensus Estimate for revenues is pegged at $41.94 billion, indicating year-over-year growth of 24.01%.
Shares of this Zacks Rank #3 (Hold) company have gained 9.2% year to date compared with the Zacks Consumer Discretionary sector’s rise of 4.5% due to steady growth in DTC subscribers and revenues in the previous quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.