The day has come. Today, Disney+ launched the ad-supported “Disney+ Basic” tier at $7.99 per month. The plan is currently only available in the US and will be available in other countries sometime next year.
“Today’s launch marks a milestone moment for Disney+ and puts consumer choice at the forefront. With these new ad-supported offerings, we are able to deliver greater flexibility for consumers to enjoy the full breadth and depth of incredible storytelling from The Walt Disney Company,” Michael Paull, president of Direct to Consumer, said in a statement.
Netflix has its work cut out for it if it wants to compete with Disney+’s new ad-supported tier. For example, Disney+ Basic not only allows viewers to stream high-quality video, including Full HD, HDR10, 4K Ultra HD, Dolby Vision, and Expanded Aspect Ratio with IMAX Enhanced, but it also allows subscribers to stream on up to four supported devices simultaneously. Additionally, the ad plan includes Disney+’s full content catalog.
Netflix’s ad-supported plan, on the other hand, only supports 720p HD video quality, subscribers can only stream on one device at a time, and around 5% to 10% of Netflix’s content library is missing due to licensing restrictions.
Neither Disney+ Basic nor Netflix’s “Basic with ads” plan allows offline viewing or downloading.
Other features not included in the Disney+ Basic plan at launch are GroupWatch, SharePlay and Dolby Atmos. A Disney spokesperson told TechCrunch that the company hopes to support this in the future, but the exact timing is unknown.
The ads will range from 15 to 30 or 45 seconds, the spokesperson added. As we previously reported, Disney+ limits total ad load to an average of four minutes of commercials per hour. Preschool content has zero ads.
The company also revised the Disney package. Disney Bundle Duo (Disney+ Basic and Hulu’s ad plan) will cost $9.99/month. There is also Disney Bundle Trio Basic (Disney+ Basic, Hulu’s ad plan and ESPN+) will be $12.99/month and Disney Bundle Trio Premium is priced at $19.99/month.
Alongside the launch, Disney+ increased the price of its Premium ad-free subscription to $10.99/month, up from $7.99. So while it may seem like Disney+ is launching a cheaper tier, the reality is that subscribers will have to pay the same price for a plan that will now get ads.
Research firm Kantar found that 23% of existing Disney+ subscribers plan to switch to the new tier, Deadline reported. This means that more than 37 million subscribers can choose to pay the same price they always have, but for an arguably “downgraded” subscription plan.
Hulu, the Disney-owned streaming service, also received a price increase, along with the Disney Bundle and Hulu Live TV.
The main reason Disney+ launched the ad-supported tier was to open up the streaming service to new subscribers. Disney previously said the new tier will keep the company on track to reach its goal of 230-260 million Disney+ subscribers by 2024. The streamer reported an impressive total of 164.2 million global subscribers in Q4 2022, which includes 46.4 million domestic subscribers.
Disney’s direct-to-consumer division also lost $1.5 billion, so the ad-supported tier is a potential new revenue stream for the company. The streaming giant boasted in today’s announcement that Disney+ Basic is launching with over 100 advertisers.
“Today, we welcome Disney+ with ads to the largest, most diverse and impactful portfolio in the industry. We are committed to connecting our customers to the best storytelling in the world, while delivering innovation and viewer-first experiences in streaming now and in the future, says Rita Ferro, president of Disney Advertising.