(NewsNation) — Disney surpassed Netflix with a total of 221 million customers across its streaming services, and now it plans to increase prices for customers who want to watch them without commercials.
The Walt Disney Company started Disney+ in 2017 with the goal of rivaling Netflix as audiences moved from traditional cable and broadcast television to online viewing. It also owns Hulu and ESPN+.
Recently, the Walt Disney Company edged past Netflix when it added 14.4 million Disney+ customers. That’s more than the 10 million originally expected by analysts polled by FactSet, as it released the “Star Wars” series “Obi-Wan Kenobi” and Marvel’s “Ms. Marvel.”
Deadline reports that Netflix has 220.67 million total global subscribers, although it pointed out the latter service doesn’t have bundles. Disney counts subscribers to its subscription videos on demand bundles as one for each service included, Deadline wrote, meaning subscribers to Hulu Live TV are counted as one each for Hulu Live TV, Disney+ and ESPN+.
“Disney went into this fight with an incredible advantage,” NewsNation business contributor Lydia Moynihan said on “Morning in America.” “When you think about their vast library, it’s must-have content for anyone with kids. Anyone who likes Star Wars, Marvel, Pixar — they have an incredible library. And basically, the only thing they had to do was put it online.”
Netflix, on the other hand, had to create a lot of its content from scratch, Moynihan said. Still, that streaming service isn’t going anywhere, she added.
“Netflix has been able to create a lot of new and original content that people clearly want to see,” Moynihan said, noting that it has been profitable.
A rise in viewership didn’t stop Disney from losing money on its streaming business— Disney+, Hulu and ESPN+ combined to lose $1.1 billion, according to CNBC.
“There’s a lot of questions moving forward, because they did have a great quarter,” Moynihan said. “But they also lost a billion dollars on this streaming service, so they’re clearly able to get a lot of subscribers but lost money in the process. So is that sustainable?”
To make the streaming business more profitable, per CNBC, Disney is unveiling a new pricing structure this winter. Starting Dec. 8, Disney+ with commercials will be $7.99 per month, which is the current price of Disney+ without ads. Ad-free Disney+ will be $10.99, a $3 increase, Hulu without ads will be $14.99, and Hulu with ads will up its price from $6.99 to $7.99. Meanwhile, ESPN+ price with ads is going up by 43% to $9.99.
“Whether or not people are willing to put up with those hikes prices remains to be seen,” Moynihan said. “We’ve had some good times where people are home during COVID. They want to watch content, they have money to spend. Now, that landscape is changing.”
Reuters contributed to this report.