Disney+ Bows Lower-Priced Ad-Supported Subscription Option in the U.S.
December 8, 2022
Disney has launched in the U.S. (only) its much-anticipated ad-supported subscription streaming option — “Basic With Ads” — priced at $7.99 monthly — the previous price for the ad-free Disney+, which now costs $10.99 per month.
The Disney+/Hulu bundle with ads is $9.99 monthly, and $12.99 when including ESPN+ with ads. The Hulu + Live TV bundle with ESPN+ and Disney+ (all with ads) is $69.99 monthly.
“Today’s launch marks a milestone moment for Disney+ and puts consumer choice at the forefront,” Michael Paull, president of direct to consumer, said in a statement. “With these new ad-supported offerings, we’re able to deliver greater flexibility for consumers to enjoy the full breadth and depth of incredible storytelling from The Walt Disney Company.”
“Today we welcome Disney+ with ads to the largest, most diverse and impactful portfolio in the industry,” added Rita Ferro, president of Disney Advertising. “We are committed to connecting our clients to the best storytelling in the world while delivering innovation and viewer-first experiences in streaming now and in the future.”
The move comes as rival Netflix launched an ad-supported option on Nov. 3, with competitors Paramount+, Peacock, Hulu, HBO Max and Discovery+ already offering ad-supported subscriptions.
Disney+, which ended November with 164.2 million subscribers worldwide, plans to roll out the ad-supported option in select markets next year.
Dallas Lawrence, SVP at streaming data research firm Samba TV, contends Disney is uniquely positioned to benefit from the next phase of advertising dollars coming to streaming TV from linear television. Lawrence notes nine out of 10 adults who do not currently have a Disney+ subscription watch other ad-supported streaming content, suggesting these audiences have no aversion to watching ads in exchange for free or reduced-price content.
“Disney knows the consumer and the advertising industry better than almost anyone and now has the potential to capture previously untapped audiences as their ad-supported tier is rolled out, especially younger, more affluent viewers,” Lawrence said in a statement.
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Kevin Krim, CEO of TV measurement company EDO, says Disney has been blurring the lines between streaming and linear TV for awhile. For example, new Disney+ series “Star Wars: Andor” aired two full episodes across Disney-owned and ad-supported ABC, Freeform, FX and Hulu.
“Disney+ is the fastest growing streaming platform right now, and the basic plan offers yet another step toward its profitability,” he said. “Most TV viewers are actually okay being served ads in exchange for lower subscription costs, but they still demand entertaining, engaging premium content and quality ads delivered with great technology.”
Matt Spiegel, EVP of media and entertainment at research firm TransUnion, said he believes that while Netflix has generated more industry attention with its ad-supported subscription option, comparing it with Disney+ is shortsighted as the ad-supported plan is more of an ad-on strategy.
“The market expects more out of Netflix following its long stance of remaining ad free,” Spiegel said. “This is business as usual for Disney that will garner its own attention without competing against Hulu and its other media brands.”