Disney to offer low cost ad-supported Disney+ subscription service

Disney is introducing a lower cost subscription package for Disney+, its fast growing streaming TV service. The new offering will be supported with ads, and will provide an alternative to the current annual ad-free proposition.

The ad-supported Disney+ service will launch in the US, late 2022, and roll out internationally in 2023. The move could prove pivotal in its battle with Netflix. The company’s stated aim is to achieve 230-260 million Disney+ subscribers by 2024.

There’s no details yet on what the cost will be, any specific UK launch date, or what price hikes are likely to hit the ad-free plan. 

The company’s stated aim is to achieve 230-260 million Disney+ subscribers by FY24…

“Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone, consumers, advertisers, and our storytellers,” said Kareem Daniel, Chairman, Disney Media and Entertainment Distribution. “More consumers will be able to access our amazing content. Advertisers will be able to reach a wider audience, and our storytellers will be able to share their incredible work with more fans and families.”

The move shouldn’t come as a surprise. Disney already offers Hulu as all ad-supported video-on-demand subscription services, and ESPN+. The Mouse House says the ads will be contextually relevant to viewers.

“Since its launch, advertisers have been clamouring for the opportunity to be part of Disney+ and not just because there’s a growing demand for more streaming inventory,” said Rita Ferro, President, Advertising, Disney Media and Entertainment Distribution. “Disney+ with advertising will offer marketers the most premium environment in streaming with our most beloved brands, Disney, Pixar, Star Wars, Marvel and National Geographic. I can’t wait to share more with advertisers at the Upfront.”

David Sidebottom, Lead Market Analyst at Futuresource Consulting, covering Media and Entertainment, told us that AVoD (advertising-based video on demand) will accelerate the competition for eyeballs, further fragmenting streaming viewing.

“2021 was a mixed bag for streaming services in 2021, but there were still 230 million net subscriber additions in 2021 worldwide, taking the total to over 1.4 billion subscriptions,” he says.

“Consumers are becoming increasingly savvy in managing their SVoD portfolios, so it’s not necessarily about “service stacking” anymore, but “service surfing” – meaning that any new subscription taken may mean a subscriber cancelling an existing service. However, we still see steady, albeit slowing growth moving forwards.”