Now that Disney+ has established itself as a worthy competitor to Netflix and Amazon Prime Video, Disney is planning to launch an ad-supported option for its streaming service, but isn't willing to tell us how much it will cost yet.
Announced today, but not rolling out until late 2022 in the US (and 2023 internationally), Disney views the new subscription tier as a way of broadening its potential audience.
"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. "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+ currently costs $7.99 per month, or $13.99 with Hulu and ESPN+ bundled. On its own, Hulu costs $12.99 per month, but you can opt for an ad-supported version for $6.99. If Disney decided to offer a similar price drop for ads on Disney+, the price would likely drop to $4.99. That works well for the marketing department who can advertise it as "under $5." Disney could surprise everyone, though, and be more aggressive by setting the price at $3.99.
Disney's main rivals, and in particular Netflix, will watch with interest to see how popular an ad-supported subscription turns out to be. If it increases Disney+ subscriber numbers substantially, Netflix will be very tempted to go down the same path in the near future. You may remember HBO Max introduced an ad-supported tier in June last year, dropping the price $5 to $10 per month.