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Bulletins

Disney+ will launch an ad-supported tier in its quest for world domination

The company didn't say how much the new tier would cost.

Disney+ on a TV

Disney+ will launch an ad-supported tier later this year.

Photo: Thibault Penin/Unsplash

Disney+ will soon offer a cheaper subscription, but you'll have to sit through ads.

Disney on Friday announced that it will introduce an ad-supported tier toward the end of this year in the U.S., with plans to roll out the new plan internationally in 2023. The company didn't say how much the new tier would cost, though it will presumably be cheaper than the $7.99/month premium subscription.

Disney called the ad-supported tier a "building block" toward the company's larger goal: amassing 230 million to 260 million Disney+ subscribers by fiscal year 2024. That's ambitious, given that the company reported 129.8 million subscribers in its latest earnings report.

Disney is no stranger to ad-supported streaming; the company also owns Hulu, which offers a $6.99/month plan with ads and a $12.99 tier without. Disney+ rivals like HBO Max and Peacock also offer ad-supported tiers in addition to premium plans, with Peacock going so far as to offer an entirely free plan. Netflix notably does not have ads on any of its tiers, the cheapest of which starts at $9.99 per month, and the company also no longer offers a free trial to get started. Netflix, which has 222 million subscribers, has taken the opposite approach from HBO Max and Disney+: In January, Netflix raised prices on all of its tiers in the U.S. and Canada by $1 to $2, the second such price increase in less than two years.

The new plan will likely start rolling out just as the service's heavily discounted three-year subscription, which was introduced at launch in November 2019, will expire. That plan required subscribers to pay $170 upfront, but knocked a full year's worth of Disney+ off the total price. It's unclear whether families will decide that sitting through ads will be worth the savings, or if children will revolt, but Disney stands to benefit either way.

Caitlin McGarry

Caitlin McGarry is a former news editor at Protocol.

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