Disney+ will introduce an additional advertising-supported subscription offering in the United States in late 2022 and plans to expand internationally in 2023. This will offer a lower cost price point, although pricing details have yet to be announced. It is seen as a way of helping the company to double the number of subscribers to Disney+ over the coming years.
“Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone — consumers, advertisers, and our story-tellers,” said Kareem Daniel, the chairman of 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.”
Disney controls Hulu, which was a pioneer of the combination of advertising and subscription funded services. NBCUniversal, owned by Comcast, has a one-third stake in Hulu, but will be moving programming to its own Peacock subscription service, which also has an advertising-supported tier.
Neither Netflix nor Amazon Prime include advertising, which is probably a large part of their appeal. HBO Max from WarnerMedia, which will merge with Discovery, added an advertising-supported option last year. Discovery Plus and Paramount Plus also offer an advertising-supported lower cost option.
Rita Ferro, the president of advertising at Disney media and entertainment distribution, said that since its launch, “advertisers have been clamouring for the opportunity to be part of Disney+”. That is not just because there is a growing demand for more online video advertising opportunities but because Disney brands offer a premium environment.
The advertising-supported offering is viewed as a building block to achieving the corporate aim of 230 million to 260 million Disney+ subscribers by 2024.
At the end of 2021, Disney+ had 42.9 million subscribers in the United States and Canada, and a further 86.9 million elsewhere, including 45.9 million to Disney+ Hotstar.