Earlier this month, Disney+ launched a brand new ad-supported tier in many countries across Europe, including in the UK, France, Germany, Switzerland, Italy, Spain, Norway, Sweden, and Denmark. The new ad-supported tier is priced at £4.99/€5.99 a month, which is over half the price of the premium plan without ads. Disney is planning on expanding its ad-supported tiers to other countries in 2024, as it pushes forward with its five-year plan to make Disney+ profitable by the end of 2024.
There are some compromises that users need to make to have access to Disney+ at a lower price, as currently, the ad-tier doesn’t offer downloads to a device, though Netflix is set to start allowing users on the ad-tier to be able to do this soon, so its likely other streaming services like Disney+ will do the same.
The ad-supported tier launched in the United States over a year ago, and now over half of new signups to Disney+ are now taking the cheaper option. That number will likely increase even further when Disney eventually merges Hulu into Disney+, since over 90% of Hulu subscribers are on the cheapest tier.
According to a new report from Omdia’s Rob Moyser & Matthew Evenson via TBIVision, over the next six years, the ad-supported tier of Disney+ is going to continue to grow, with their estimates showing over 20 million subscribers will be on the cheaper option.
With the lower price, along with consolation within the streaming industry, partner promotions and a clampdown on account sharing, the platform will continue to pull in new subscribers over the next few years. While Disney will make less money directly from subscriptions with the ad-supported version, it actually makes more money per user due to getting additional revenue from advertising.
Much like with the launch of the ad-supported tier in the United States, it will take a long time for the ad-supported tier to build up its subscriber numbers. Now, a year later, half of all new subscribers take the cheaper option. There will also be lots of existing subscribers, who, due to increasing prices of the ad-free tier and due to financial reasons, will likely drop down to a lower tier to save money. And last week, during a special launch event for the ad-supported tier, Deborah Armstrong, who is the General Manager of Media Networks and Advertising, EMEA, explained to me that:
We know it can take a while for these services to develop and build. That’s normal. It’s a launch.
This chart from Omdia does fall in line with that thought, where the introduction of the ad-supported tier is likely to take a while to be the standard, but in the long run, especially as Disney will no doubt encourage more people to shift to the plan in the future and with promotions now being able to highlight the lower price, it will look more attractive to people.
And when you also take into account that the ad-supported tier will also be launched in many more countries before 2030, globally, the percentage of users on the ad-supported version is only going to continue to become more larger.
Do you think the ad-supported tier will become the standard way of watching Disney+? Let us know on social media!
Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom.