Disney and Apple are experiencing significant changes in their longstanding business relationship, particularly affecting how customers interact with Disney+ and Hulu. Starting immediately, new subscribers to either streaming service will no longer be able to register and manage their payments through the Apple App Store. Instead, users must navigate to the respective websites of Disney+ or Hulu to initiate or manage subscriptions.
This new approach marks a shift as Disney moves away from using Apple's payment processing, which typically takes between 15% and 30% of subscription revenues. The adjustment follows criticisms from Disney's CEO Bob Iger, who has publicly pointed out the high costs associated with Apple's sale model. "We have to look at the way we're distributing," Iger mentioned during an investor conference back in May, indicating dissatisfaction with third-party app stores and highlighting Disney’s focus on cost-effectiveness.
The decision isn't just about saving on fees; it's also part of a broader strategy to streamline revenue. By managing payments directly, Disney can retain more of the subscription revenue generated through its platforms. Meanwhile, existing subscribers who originally signed up through the App Store can continue with their current payment arrangements. Hulu specified, though, new or returning subscribers must cancel any existing Apple subscriptions and resubscribe directly via the Hulu or Disney+ websites to avoid Apple’s fees effectively.
The change also coincides with new pricing for both Disney+ and Hulu, which saw their rates increase recently. The ad-supported version of Disney+ went up to $10 per month from $8, the ad-free version rose to $16 from $14, and Hulu's ad-free plan is now $20, up from $18. These price hikes may seem disconnected from the new subscription model, yet they reflect Disney's ambition to improve profitability without sacrificing service quality.
The split signifies more than just financial adjustments; it signifies the shifting dynamics between tech companies and content providers. While Disney has maintained collaborative projects with Apple, such as creating apps for Apple’s Vision Pro headset, this decision to cut off subscriptions via the App Store could lead to complications, including diminished integration features like AirPlay support and access to Apple’s Video Partner Program.
Apple has faced criticism for its App Store policies over the years, resulting in disputes with prominent companies like Epic Games and Spotify, who assertive about the adverse impact of Apple's revenue-sharing model on their businesses. Spotify’s legal battle against Apple highlighted the streaming industry’s tension, culminating in rulings favorable to Spotify. Now, with Disney taking similar actions, the precedent is set; more media companies may opt for independent payment processing to maximize profits.
This strategy aims to give consumers more options, albeit with additional steps for the signup process. Users can choose the streamlined method of securing services through the web or continue experiencing the convenience of the App Store — usually at higher costs. For many, these choices reflect the broader shifting economic strategies seen across the tech and media landscapes.
While the change delights some consumers by possibly leading to lower subscription fees, it adds complexity to the user experience. The inconvenience of switching to web payments could deter some subscribers, potentially impacting the overall user base if the sign-up process turns out to be burdensome for new users.
Industry watchers speculate about the possible ripple effect of this decision, which could inspire similar moves from other major content providers. The upcoming months will be pivotal as companies weigh their options within Apple’s ecosystem against the backdrop of the rapidly changing streaming market.
For now, those eager for their favorite Disney and Hulu content will need to adjust their sign-up habits. The switch from app-based to web-based subscriptions raises questions about the future frameworks of streaming services, ensuring all eyes remain on how this plays out and what it means for viewers and companies alike.
