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Why Disney+ Is Adding A Cheaper Commercial Plan, According To Exec

Boba Fett facing down adversaries in Mos Espa
(Image credit: Lucasfilm)

Last week, Disney+ confirmed reports that later this year the streaming service will add a second tier that will include advertising, but will come in at a lower price point than the current ad-free service. Considering the success that Disney+ has had with its current model, the ad-supported tier was perhaps a surprising addition to some, but The Walt Disney Company’s Chief Financial Officer says that it’s something that some consumers actually want, and something that advertisers really want.

Disney CFO Christine McCarthy recently appeared at the Morgan Stanley’s 2022 Technology, Media & Telecom Conference and she explained (via Variety) that, when Disney+ first launched, the company believed that ad-free streaming was what most consumers wanted. However, some additional research done since then has shown that some consumers actually view ad-supported streaming more favorably than ad-free streaming. It’s also the case that there are a lot of advertisers who are interested in putting their ads on Disney+. McCarthy explained…

We had some preconceived notions of what consumers wanted [before launching]. We also had an incredible amount of advertiser demand.

It’s not hard to imagine that there have been advertisers chomping at the bit to get access to the subscribers to Disney+. There are millions of people who would see such ads, including families and kids. It will be interesting to see how Disney handles advertising specifically because many viewers will be impressionable kids. 

One of the reasons an ad-supported tier seemed unlikely is that Disney+ is already one of the least expensive of the major streaming services with its current iteration. While the exact price of the ad-supported option has not been announced, it will be something less than the current $7.99 per month.  

This will make it one of the least expensive streaming options on the market, perhaps even less than Apple TV+. And certainly, any consumers who have not subscribed to Disney+ yet because of the price will certainly consider doing so, which is the point. Disney has some pretty aggressive goals when it comes to future subscriber numbers, and while McCarthy said the new option was not a “hail mary” attempt to hit those goals, one has to assume that those numbers are part of the calculus. Setting and hitting financial goals are a big part of how Wall Street makes decisions, and that can impact the all important share price. 

Disney+ is already one of the biggest streaming platforms in the world and it will certainly see a boost to those numbers when the new cheaper option arrives. Disney will gain subscribers, and the loss in revenue from those users compared to the ad-free service will be more than made up for by the income from the advertisers who will be very happy to get access to hundreds of millions of potential customers. 

Dirk Libbey
Dirk Libbey

CinemaBlend’s resident theme park junkie and amateur Disney historian. Armchair Imagineer. Epcot Stan. Future Club 33 Member.