Disney+ Just Got More Expensive For Those Who Don’t Want Ads
Like many of its fellow streaming platforms, Disney+ is ready to roll out its new ad-supported tier. The new subscription tier launches today and Disney will be charging $7.99 for the ad version and $10.99 for the ad-free version. In other words, you’ll have to cough up a few extra bucks if you want to avoid 15 and 30-second ads while you’re watching the next season of The Mandalorian.
While no one is probably excited about ads entering their Disney+ experience, it’s certainly not surprising. Disney announced an ad tier earlier this year and Netflix just launched its new ad-supported tier last month. It appears that ad tiers are going to be the new norm in the streaming landscape.
Disney is probably eager to increase the profit potential of Disney+, especially after the recent ousting of CEO Bob Chapek. Following a quarterly earnings call that showed around $1.5 billion was lost in the company’s streaming division, amongst other complaints about Chapek’s tenure, Chapek was replaced by former CEO Bob Iger. Reports indicate that Chapek was spending too much on the streaming division to produce new content and allegedly may have misled investors on how much the streaming service was actually losing.
There’s little doubt that Disney+ costs the company a lot of money to produce the caliber of shows they’ve been continually releasing on a regular basis. Their two biggest properties, Star Wars and Marvel, are extremely popular but the shows also have fairly hefty budgets. Flagship shows like The Mandalorian, Loki, and WandaVision certainly attract subscribers, but it appears it’s not enough to balance out the money that’s been sunk into the streaming tech, marketing, and content production.
With the Disney+ ad tier, they may be able to start getting into the green with their streaming service. According to Variety, Disney has secured over 100 advertisers including Dentsu, Havas, Horizon, Interpublic Group’s Mediabrands, Omnicom Media Group, Publicis, RPA, Stagwell, and WPP’s GroupM. Rita Ferro, the president of advertising sales at Disney, also indicated that they have enough variation in ads that users won’t be subjected to seeing the same ads over and over again while watching a show or movie.
The reports also say that Disney+ will not show more than four minutes of ads per hour and that none of the ads will be for alcohol or political campaigns. Additionally, users under the age of seven will not be served ads and users between the ages of seven and 17 will be served ads but they won’t be able to be targeted specifically. Ads will primarily be pre-roll and mid-roll ads, meaning they’ll show up before the show or movie begins and at periodic points throughout the program.
Disney hopes that Disney+ will hit its goal of reaching 230 million to 260 million subscribers by 2024, with current global subscribers sitting around 164 million. With the new ad tier, maybe they’ll be able to draw more people in at a $7.99 price point — though it’s worth noting Netflix’s tier is $1 cheaper. We’ll have to wait and see if this new tier helps or hurts the House of Mouse.
