Later this year, Disney+ will be introducing a new ad-supported tier in the United States, with an international rollout to follow in 2023.
Currently, this new ad-supported tier has announced no pricing or launch date, but some new details have been revealed this week as part of Disney’s Upfront advertising event.
Rita Ferro, president of Disney Advertising Sales, recently took part in the 9th Annual MoffettNathanson Media and Communications Summit and said that the Disney+ ad-supported tier will have an average of four minutes per hour out of the gate — a lighter load than Hulu.
The Disney+ ad-supported service will start with 15- and 30-second spots, but will expand to a “full suite of ad products” over time.
Earlier this week, it was revealed that there would be selected advertisements on Disney+, which won’t include political or alcohol, but Rita Ferro did confirm there will be some advertising on some children’s content, but just no advertising on pre-school content at launch.
“Yes, we’re going to have advertising… to kids, but it’s going to be controlled advertising with a lot of parental levers to pull. We’re not going to collect data on that.”
The ad-supported offering is viewed as a building block in the Company’s path to achieving its long-term target of 230-260 million Disney+ subscribers by FY24.
And according to Disney, they are expecting the ad-supported tier to become the most popular tier for subscribers, following what they’ve seen with Hulu, where 70% of Hulu’s subscribers are on the cheaper ad-supported tier, with Rita Ferro stating:
“We expect about the same percentage for both Disney+ and Hulu, just based on the experience curve that we’ve witnessed.”
While the cost for subscribers will be less for the ad-supported tier, from Disney’s side, should it follow a similar path to Hulu, they could actually make more money per subscriber with ads, than from those on an ad-free tier.
Will you be taking out the cheaper ad-supported tier or staying on the ad-free tier?