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Walt Disney (NYSE:DIS) owned ESPN will raise the price of its streaming service, ESPN+, by 43% next month, according to Bloomberg.
The report stated the company aims to cover rising sports rights costs while not outpricing subscribers. The ESPN+ subscription price is rising to $9.99 a month from $6.99 per month. “The price increase reflects the growing amount of live sports and original programming on the streaming service,” Bloomberg said ESPN stated.
They state that programming and production costs at ESPN+ increased 48%, to $454 million, in the quarter that ended in April, while Disney’s direct-to-consumer business lost $887 million during that period.
Even so, the price increase comes despite consumers grappling with soaring inflation, which is expected to cause a reduction in discretionary spending.
In addition, Bloomberg states that media companies are under pressure to make their streaming services profitable, with ESPN+ experiencing strong growth in subscribers but not yet making money.
However, as they point out, there is a possibility the move could encourage consumers to move over to Disney’s streaming bundle, which includes ESPN+, Disney+, and Hulu, and costs $13.99 a month.
Disney shares are trading 3% higher Friday.
