Although Disney (DIS) said the new level of advertising will join the subscription option in the United States later this year, details are scarce. The exact launch date and prices will be “announced later”, the company said, with international expansion in 2023.
“Extending Disney + access to a wider audience at a lower cost is a win-win situation,” said Karim Daniel, chairman of Disney Media and Entertainment Distribution. “More users will have access to our amazing content. Advertisers will be able to reach a wider audience, and our storytellers will be able to share their amazing work with more fans and families.”
Disney said it sees the advertising level “as a building block” in the company’s goal of reaching 230 million to 260 million long-term subscribers by fiscal 2024.
As of January 1, Disney + had nearly 130 million subscribers. It is one of the biggest competitors in the streaming market and is now joining services such as Paramount +, NBC’s Peacock and WarnerMedia’s HBO Max, offering a cheaper ad-supported option. (HBO Max, like CNN, is a division of WarnerMedia.) Netflix (NFLX) – the leader in streaming with nearly 222 million subscribers – is rumored to be reluctant to add an ad level.
But at Disney, a cheaper level can help the company’s most important asset grow faster and bring in more money to offset high content costs.