Disney+ is creating an ad-supported tier for its streaming service to ramp up its growing subscriber base.
Though Disney (DIS) shared that the new ads tier will join the subscription option in the United States sometime later this year, details are scant. The exact launch date and pricing will be “announced at a later time,” the company said, with an international expansion in 2023.
“Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone,” Kareem Daniel, the chairman of Disney Media and Entertainment Distribution, said in a statement. “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 said it sees the ad tier “as a building block” in the company’s goal of reaching 230 million to 260 million long-term subscribers by the 2024 fiscal year.
As of January 1, Disney+ had nearly 130 million subscribers. It’s one of the biggest competitors in the streaming market, and now it joins services like Paramount+, NBC’s Peacock and WarnerMedia’s HBO Max in offering a cheaper ad-supported option. (HBO Max, like CNN, is a unit of WarnerMedia.)
Netflix (NFLX) — the streaming leader with nearly 222 million subscribers — has been vocal about how it has no desire to add an ads tier.
But at Disney, a cheaper tier could help the company’s most important asset grow faster and bring in more money to help offset high content costs.
