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When it first launched in 2019, Disney’s new streaming service, Disney+, one of the perks was that you had access to hundreds of television shows and movies without having to deal with advertisements. At the time, the biggest competition Disney+ had was Netflix, which also does not have ads in its service. However, since its launch, a number of new streaming services have popped up and become more popular — especially because of the pandemic. Many of these new streamers offered both ad-free and ad-supported tiers. The ad-supported tears were much cheaper than Disney+.
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Due to the new — and increasingly popular — streaming options, Disney recently said that they were considering creating an ad-supported tier for Disney+. That was previously something the company had been more resistant to. Well, those considerations are now a reality and Disney will indeed be offering an ad-supported tier to users later this year. The news broke on The Hollywood Reporter, which wrote:
Subscriber growth for Disney+ did slow last year, particularly in North America. And while last quarter the company added more Disney+ subscribers than forecast (it now has about 130 million), much of that growth is overseas in markets with lower pricing. A new lower-cost ad tier in the U.S. could help spur fresh growth here, while adding substantial revenue.
“Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone — consumers, advertisers, and our storytellers,” Kareem Daniel, chairman of Disney Media and Entertainment Distribution, said in statement. “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.”
In a statement, Disney’s head of ad sales, Rita Ferro ,said that she will share more about the plan at the company’s upfront presentation in May, adding that “advertisers have been clamoring for the opportunity” to partner with Disney+.
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While Disney+ started off strong, quickly reaching tens of millions of subscribers, subscription numbers have since slowed down. It is most likely due to this die-down in new subscribers that Disney has decided to work with advertisers. Advertising can bring a lot of money to Disney. Hulu — which is owned by Disney — offers both ad-free and ad-supported options, and the advertising brings in nearly as much revenue as subscription costs.
