Launching in the US in late 2022 and worldwide thereafter, the new ad-supported offer is expected to boost Disney’s subscriber numbers.
Streaming service Disney+ will introduce a new ad-supported format later this year in an effort to grow its subscriber base.
“Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone – consumers, advertisers and our storytellers,” said Kareem Daniel, chair of Disney media and entertainment distribution.
Disney owns the ad-supported streaming and on-demand film and TV services Hulu and ESPN+, but this is a first for its own-brand streaming platform.
Disney landed a majority stake in Hulu following its acquisition of 21st Century Fox in 2019, and ESPN has operated as a division of Disney since the mid-1990s.
Rita Ferro, president of advertising at Disney media and entertainment distribution, said there has been high demand from advertisers to secure a platform on the major streaming service.
“Since its launch, advertisers have been clamouring for the opportunity to be part of Disney+ and not just because there’s a growing demand for more streaming inventory,” she said.
Launched in Ireland in 2020, Disney+ offers subscribers access to content from the broad library of Disney studios and properties, including Pixar, Marvel, Star Wars and National Geographic.
Roll-out of the cheaper, ad-supported subscription will begin in the US in late 2022. Disney then plans to expand the offering internationally in 2023.
Further details on the launch, such as pricing, has not yet been revealed.
The media giant’s goal is to reach up to 260m Disney+ subscribers by its full-year 2024 earnings call.
Last summer, the gap between Disney+ and its chief competitor Netflix was shown to be narrowing, though the former’s average revenue per subscriber took a dip. This drop-off was attributed to the rapid growth of Hotstar, its Indian streaming service, which sells at a lower price point than in other markets.
Meanwhile Netflix is making a play for subscribers through adding games to its offering. Earlier this week, the company shelled out €65m for Finnish game studio Next Games having already acquired US game developers Night School Studio last year.
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