Disney+ to release a more affordable ad-supported tier later this year
Key takeaways:
- Disney revealed a new ad-supported tier for its Disney+ streaming service on Friday.
- Disney did not offer a launch date or cost for the new level but was told it would arrive later this year.
- Adding an advertising-support tier will let Disney increase average earnings per user — a metric that presently trails most competitors.
Disney+ Hotstar plans to make more profits this year:
Disney declared on Friday a new ad-supported tier for its Disney+ streaming service that will release in the U.S. later this year.
Disney did not provide a release date or cost for the new tier. The new ad-supported tier will grow globally in 2023.
The firm stated in a press release that the new offering would be "a building block" in reaching its objective of getting 230 million to 260 million Disney+ subscribers by 2024.
Adding an advertising-support tier will let Disney grow average income per user — a metric that now trails most contenders. Comcast Chief Executive Officer Brian Roberts stated earlier quarter NBCUniversal's Peacock had ARPU of about $10 per month per user, primarily driven by advertising. Disney+'s average gain per user per month for Disney+ in the U.S. and Canada was $6.68 the prior quarter.
WarnerMedia's HBO Max, Paramount Global's Paramount+, and Discovery's Discovery+ are among the streaming platforms already present advertising-supported streaming alternatives.
Hulu, majority-owned by Disney, already presents an ad-supported product for $6.99 each month, likened to its ad-free service, which costs $12.99 per month.
According to an individual familiar with the matter, Disney is streamlining backend technology to help sell advertising on all of its streaming products.