Once upon a time, streaming services were a lot simpler -- with just one monthly option, for the most part. But that was then. A whole lot of changes are now coming -- with ad-free options, ad-supported options, bundled options, and more.

Walt Disney (DIS -0.24%) is a good example. In recent weeks, the entertainment giant has announced a series of new prices, aimed at increasing its returns. Let's take a look at that strategy and whether it makes sense.

Disney has several streaming services, and they are almost all about to cost more. For starters, the media giant is raising the price of its flagship streaming service, Disney+, by $3 in the U.S. in order to make room for its forthcoming ad-supported tier (coming Dec. 8) at the current $7.99-per-month price.

In addition, Disney is raising the price of its Hulu service by $1 or $2 per month depending on the plan, and Hulu's Live TV service will get a price hike as well. Finally, Disney has also announced that the monthly price of ESPN+ is increasing.

The only offering that isn't changing in price is the premium Disney Bundle, which combines ad-free Hulu, Disney+, and ad-supported ESPN+ for $19.99 per month. And there's an interesting reason why.

All about the bundle

Disney has been pushing its bundle of streaming services more than any individual service. If you go to sign up for Disney+, you'll be met with an offer to sign up for the bundle before you'll find where to sign up for the individual service.

And Disney wants you to buy the bundle for good reason. First of all, the bundle boosts its subscriber numbers. Instead of counting one streaming subscriber from a Disney+ signup, it can count three -- one for each service. That boosts the numbers it reports to Wall Street every quarter.

The table below details the price changes for existing and new services and bundles.

Service(s) Old Monthly Price New Monthly Price
Hulu (ad-supported) $6.99 $7.99
Hulu (ad-free) $12.99 $14.99
Disney+ (ad-supported) NA $7.99
Disney+ (ad-free) $7.99 $10.99
ESPN+ $6.99 $9.99
Disney+ (ad-free), Hulu (ad-supported), ESPN+ $13.99 $14.99
Disney+ (ad-supported), Hulu (ad-supported), ESPN+ NA $12.99
Disney+ (ad-free), Hulu (ad-free), ESPN+ $19.99 $19.99
Hulu (ad-supported), Disney+ (ad-free) $9.98 No details
Hulu (ad-supported), Disney+ (ad-supported) NA $9.99
Hulu + Live TV (ad-supported), Disney+ (ad-free), ESPN+ $69.99 $74.99
Hulu + Live TV (ad-supported), Disney+ (ad-supported), ESPN+ NA $69.99
Hulu + Live TV (ad-free), Disney+ (ad-free), ESPN+ $75.99 $82.99

Table source: Author. Data source: Walt Disney.

Of course, nobody's fooled into thinking every subscriber is paying full freight for each subscription. And Disney has been increasingly transparent in reporting its average revenue per user, which provides a clue as to what percentage of customers are bundled.

The second reason for pushing the bundle is that it reduces subscriber churn. That's particularly valuable in today's competitive market, especially as Disney's subscriber base grows larger. A small increase in churn among a large subscriber base can have a dramatic impact on net subscriber additions. That's what led Netflix (NFLX -0.97%) to produce meaningful subscriber losses through the first half of 2022.

With the new price changes, Disney is betting really big on the bundle. Not only is it keeping the ad-free subscription offer the same price, $19.99 per month, but it'll also offer subscribers willing to watch ads on Disney+ and Hulu a $1 discount from the previous bundled offer with ad-supported Hulu. The ad-free bundle provides a $15.98-per-month discount versus buying all three services separately, while the ad-supported bundle is a $13.98 discount.

Additionally, Disney is introducing an ad-supported bundle for Hulu and Disney+. Consumers can sign up for both services for $9.99 per month. That's comparable to an offer presently available to Hulu subscribers to add Disney+ for an additional $2.99 per month, but now Disney wants to make it an official offer for all customers.

Expecting no impact on churn

While Disney's making some meaningful price increases, it doesn't expect consumers to balk at the bigger bills. "We do not believe that there's going to be any meaningful long-term impact on our churn as a result," CEO Bob Chapek told analysts during Disney's third-quarter earnings call.

In particular, Chapek points to the value offered by Disney+ and its other streaming services. "We've continued to invest handsomely in our content," he said. "We believe, because [of] the increase in the investment over the past two and a half years relative to a very good price point, that we have plenty of room on price value."

That sounds a lot like Netflix's justification for price increases -- and that worked for a long time for the streaming service company; it only started seeing significant price sensitivity in the last couple rounds of price increases. Given the amount that Disney is investing in Disney+, in particular, it should remain a great value in streaming despite the price increase. And the Disney Bundle is an even better relative value.

With the idea that bundled subscribers churn less, and that Disney's new pricing will push more people to use the bundle, Chapek's comments make a lot of sense. In fact, pushing more people to bundle based on its pricing could result in even lower churn, allowing Disney to grow all of its services toward its 2024 goals.

Management reiterated its expectations for the Disney+ core service to reach 135 million to 165 million subscribers (but lowered expectations for Disney+ Hotstar). It also expects Hulu to reach 50 million to 60 million subscribers that year, and ESPN+ to reach 30 million subscribers.

While the price increases may worry some investors, especially after seeing Netflix's results, Disney's bundled offering is starting to look like an even better deal. And that should push it to continue growing toward its goals over the next two years.