Disney+ To Roll-Out Ad-Supported Plan As Market Shy Away From SVOD

Disney announced plans to introduce an ad-supported plan for Disney+, aiming to reach 260 million subscribers by 2024. Ads will roll out in the US in late 2022, followed by international markets in 2023. 

While the streaming platform has yet to reveal a price or specific roll-out date, the new tier would be easy on the wallet. It will be cheaper than the current price point for the ad-free subscription, which stands at $7.99 per month or $80 per year. Clearly, Disney went cheap deliberately to gain market share and reduce churn. Kareem Daniel, chairman of Disney Media and Entertainment Distribution said, 

“Expanding access to Disney Plus to a broader audience at a lower price point is a win for everyone – consumers, advertisers, and our storytellers.”

With such a low pricing point (additionally, numerous free trials and other marketing promotions), it appears like Disney+ will struggle to make a profit as a stand-alone business by 2024, as the company has claimed.

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A Step Towards AVOD

With consumers tired of expensive plans and service stacking, AVOD has become a popular option. Comcast research recently showed that 80% of consumers prefer ad-supported service over expensive ad-free SVOD options. Daniel further added,

“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,”

Disney+ will join Peacock, Paramount+, and Discovery+ in offering ad-free tiers. Currently, it costs $7.99 per month and has garnered 130 million global subscribers since its launch in 2020. Rita Perro Disney Media and Entertainment Distribution president of advertising said that the Disney Plus campaign has been a hit with advertisers, not because of an increase in streaming inventory. She further added, 

“Disney Plus 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.”

It makes sense for Disney to hold out as long as possible, advertising is always the most lucrative and low-hanging fruit. While the lowest-hanging fruit is the easiest to pick, it is also the most likely to spoil the entire bunch if not handled cautiously.

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