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Disney, Hulu will eventually resolve Live TV price surges

The recent price hike for Hulu+ Live TV has the streamer and Disney evaluating how to create more cost-effective options for users.

Hulu is under the Disney umbrella due to the latter’s acquisitions deal with Comcast. There’s already an offer of the new streamer Disney+, Hulu’s basic package and ESPN+ for $12.99 per month.

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That’s a generous package, considering Disney+ itself is $6.99 per month or $69.99 per year. However, at a recent media meeting with CodeMedia, Disney executive Kevin Mayer spoke of alternative plans to combat the raised Live TV cost.

Packaging smaller bundles with Hulu+ Live TV

Mayer is the chairman of the Walt Disney Company’s direct-to-consumer & international division. He spoke about smaller bundles, but said the aforementioned bundle is all they have right now.

I think over time, we’re going to find that one size does not fit all, and we’ll want to make some changes. […] If you offer consumers a high-quality experience at a fair price with well-timed availability of content, most people will pay you for it.

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There’s no shortage of options on Hulu Live TV+. It’s not only an excellent hub for sports fans, but it’s also got plenty of basic cable channels and a nice variety of programming beyond that.

However, the recent uptick in price from $44.99 to $54.99 per month has some consumers balking. Prices are moving up for similar services overall, and it’s actually driving people away from live TV entirely — not just basic cable and satellite subscriptions.

At least for Hulu, though, it might be a shorter-term tax on its users for a better long-term experience.

The motive for Live TV’s initial price raise

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Mayer explained how Disney has to pay a lot to offer the wealth of options it does on Hulu+ Live TV. The price jump was purely so that Disney could turn a profit on that venture.

Now this may seem like a big deal right now, but it’s possible Hulu won’t be so expensive down the road.

Firstly, a chief Live TV competitor, PlayStation Vue, is suspending operations in January. AT&T Now TV somewhat desperately hiked their prices, and are trying to package with HBO Max when that streamer launches in 2020.

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HBO Max is already going to cost $14.99 per month on its own, more than double that of Disney+. Barring a steep discount here, the bundle flexibility for that alliance is limited.

The market herd could be thinning quickly.

How Disney+ factors in to a bright forecast

Disney+ just launched. Even with limited original content, tech issues and alleged hacking of accounts, it hauled in 10 million subscribers. That was only in its first 24 hours of service to the U.S., Canada and the Netherlands.

After debuting in Australia, New Zealand and Puerto Rico on Tuesday, Disney+ already added far more content than was available on its initial wide release.

So, things are trending in the right direction in terms of consumer experience. That’ll attract more to the bundles featuring Hulu+ Live TV. Mayer stated that they’re just starting to explore beyond the aforementioned single bundle offered now.

Plus, it’s simply going to take some time for Disney+ to turn a profit. The rocky start to its service didn’t seem to deter people, though. Bottom line: as Disney’s streaming profit margins and subscriber morale increase, its Hulu+ Live TV and other bundles will benefit.

There’s already a low price point to subscribe to Disney+. Even small upticks along the way will pale in comparison to current Live TV costs. If everything is bundled together, it’ll help combat the notion of cord-cutting not being as cost-effective as once believed.

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