• by Karlene Lukovitz  @KLmarketdaily, October 4, 2023

Warner Bros. Discovery has upped the price of an ad-free subscription to Discovery+ by nearly 30% in the U.S. and Canada, and Netflix appears poised to implement a similar strategy. 

WBD announced the increases yesterday — the first domestically since Discovery+’s launch in January 2021 — making them effective immediately for new subscribers, and effective on or after Nov. 2 for existing subscribers. 

Like other recent hikes by streamers, these are designed to push more subscribers into the ad-supported tiers that generate higher per-subscriber revenue than ad-free tiers for entertainment companies. 

In the U.S., the per-month price for Discovery+ ad-free was hiked to $8.99, from $6.99, while the with-ads tier’s $4.99 price was unchanged. In Canada, Discovery+ ad-free’s price will rise to C$6.99 to C$8.99, and an “ad-lite” subscription’s price will rise from C$4.99 to C$5.99. 

On its website, Discovery+ promoting the ad-free plan as the “best value” (above). 

“This will allow us to continue to provide can’t miss-stories in the food, home, relationships, true crime, paranormal genres — plus so much more,” the company stated in the price-hike announcement. 

Discovery+ has upped the price of the ad-free Discovery Plus in the U.S. from $6.99 a month to $8.99, effective Tuesday. The streamer relies heavily on reality and lifestyle programming from the Discovery basic cable network, which is somewhat less dependent on unionized talent than scripted productions. 

The Discovery+ library was added to WBD’s premium Max streamer in April, which costs $15.99 for the ad-free tier and $10 for the with-ads tier. WBD lost 1.8 million direct-to-consumer subscriptions in Q2, but narrowed its D2C losses.

Meanwhile, Netflix — which just put new ad sales, product and technology chiefs in place — is planning to raise its prices in the U.S. and Canada “a few months” after the end of the currently ongoing actors’ strike, according to Wall Street Journal sources. 

Netflix, which has yet to comment on the report, raised the prices of all of its plans just last year, upping the ad-free standard tier to $15.99 per month and the ad-free premium plan to $19.99 per month, and debuting its $6.99-per-month ad-supported tier in November. Netflix subsequently killed its basic, $9.99-per-month ad-free plan to drive more subscribers to the with-ads plan. 

Netflix also cracked down on password sharing, charging $7.99 per month for sharing the account outside of the subscriber’s household. 

The Screen Actors Guild - American Federation of Television and Radio Artists is seeking compensation and revenue-sharing concessions, as well as protections from losing pay or credit as a result of AI, similar to those won by the Writers Guild of America in its lengthy, just-ended strike. 

While Netflix and other premium streamers can legitimately point to the new terms’ effects on production costs in making a case for more price hikes, a dearth of new content resulting from those same strikes may cause subscribers to be less receptive than usual to paying more.