Discovery+ Raises Price of Ad-Free Tier
Another streaming service is getting a price hike.
Warner Bros. Discovery says it is raising the price of the ad-free tier of Discovery+. The tier will see its price rise from $6.99 per month to $8.99 per month, effective today, Oct. 3.
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That being said, the price of the advertising tier of Discovery+ will remain unchanged at $4.99 per month.
The price increase will also impact Canada, with its ad-free tier also rising to $8.99 per month, and its ad tier rising to $5.99 per month. The company notes this is the first price hike in the U.S. and Canada markets since the service launched in early 2021.
Discovery+ joins a growing list of streaming services hiking prices in a bid to build a sustainable business. Unlike most other streaming services, WBD execs have said Discovery+ is profitable, though it is not clear how many subscribers it has, or just how profitable it really is.
The company is also following a strategy pushed by other streamers in raising prices of the ad-free tier while keeping the ad tier the same price. it's a strategy that both Disney executed with Disney+ in August, and that WBD pursued with its Max service earlier in the year.
As The Hollywood Reporter noted shortly after the Discovery+ price hike, ad tiers not only reduce churn thanks to their lower prices, but also increasingly have better margins as the advertising revenue more than makes up for the lower subscription revenue.
It's a strategy that WBD clearly hopes to replicate at its more niche streaming offering Discovery+.
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