Plus adds ads
Last Thursday Disney announced their new pricing model for their streaming service, which included Disney+ Basic, a $7.99 per-month ad-supported tier. That move follows their biggest streaming rival, Netflix, which introduced their own ad-supported tier at a comparable $7 per-month earlier this year.
The move to ads — a revenue stream that’s not exactly novel for video content — is potentially Disney and Netflix's way of pre-empting a streaming market that could be starting to slow. As more services have launched, consumers are increasingly sensitive about paying for 3, 4 or 5+ streaming services — cheaper ad-supported tiers could be one way to keep new subscribers coming in.
Perfect timing
The timing of Disney’s late 2019 launch was impeccable: lockdowns came quickly, binge-watching practically became an international sport, and Disney+ gained over 85 million subscribers in just 12 months as a result.
However, as people started turning off their TVs and venturing back outside their subscriber count appeared to stall, only adding 2.1 million in Q3 21. That made their target of 230-260m subscribers and profitability by 2024 a lofty ambition — one that they have since scaled back.
With a cheaper ad-supported tier, and slightly less-lofty ambitions, Disney now looks to be back on the right trajectory for its 2024 targets. Whether Disney+ passes Netflix’s subscriber count, which is growing even more slowly (currently at 223m), remains to be seen.
