In a first for Disney’s flagship direct-to-consumer streaming service, Disney+ will launch an ad-supported subscription plan later this year.
The ad-supported Disney+ plan will be introduced beginning in the US in late 2022, with plans to expand internationally in 2023, the media conglomerate announced Friday.
“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, in an email statement to iPhone in Canada.
“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,” added Daniel.
The company said in a press release that the new offering would be “a building block” in achieving its goal of reaching 230 million to 260 million Disney+ subscribers by 2024.
Adding an advertising-support tier will allow Disney to boost average revenue per user — a metric that currently trails most rivals. Comcast Chief Executive Officer Brian Roberts said last quarter NBCUniversal’s Peacock had ARPU of nearly $10 USD per month per user, driven largely by advertising. The average revenue per user per month for Disney+ in the US and Canada was $6.68 USD last quarter.
“Since its launch, advertisers have been clamoring for the opportunity to be part of Disney+ and not just because there’s a growing demand for more streaming inventory,” said Rita Ferro, Disney Media and Entertainment Distribution’s President of Advertising.
“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.”
Meanwhile, HBO Max, Hulu, Paramount+, and even Peacock offer customers a cheaper plan that’s supported by advertisements. But an ad-supported plan is not the only thing that Disney is considering, as the company has been experimenting with plans tailored for specific markets like India.
Disney says more details, including launch date and pricing, will be shared “at a later date.”