Edit 3/5/22 12:30 PM ET: Disney confirms cheaper subscription tier launching in late 2022
What you need to know
- Disney will introduce a cheaper subscription plan for Disney+ in the U.S.
- The plan would support ads, similar to other services such as HBO Max and Disney's own Hulu.
- The new follows slowing subscriber growth for Disney's flagship streaming platform.
Disney+ is hungry for subscribers, and its next move would allow it to further undercut the likes of Netflix and HBO Max. To do so, Disney is set to launch a cheaper ad-supported subscription tier in the U.S.
The news was first reported by The Information on Thursday and later confirmed by Disney. The media company is introducing the new tier as a way to boost its slowing subscriber growth. This comes not long after Disney raised the prices of its Hulu + Live TV service and bundled it with ESPN+ and Disney+, no doubt as a way to grab more subscribers.
"Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone - consumers, advertisers, and our storytellers," Kareem Daniel, Chairman of Disney Media and Entertainment Distribution, said in a statement on Friday. "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."
Given that Disney owns Hulu, the company is already familiar with such a strategy. However, the move will also follow other rival streaming services like HBO Max, which launched its ad-supported tier in 2021 with several limitations when compared to the ad-free subscription. When the ad-supported tier launched on Disney+, it could also place additional limits on the service, such as the availability of new movies, streaming resolution, of the number of concurrent streams you can have across the best streaming devices.
As it stands, Disney is already in a decent position as far as pricing. At $8 per month, it costs less than Netflix as well as HBO Max's ad-supported tier. However, there are several more affordable services out there, and a cheaper subscription could put Disney+ in direct competition with them. Disney also believes this will help it achieve its goal of reaching 230-260 million subscribers by 2024.
The ad-supported tier will launch in the U.S. in late 2022, with an international launch to follow in 2023. No details on pricing or features were given.
