In a bid to expand its user base and reach profitability by 2024, Disney+ plans to launch an ad-supported tier in the US.
Disney+ has announced that it will bring a new, cheaper, ad-supported tier to US customers in late 2022.
The announcement does not specify the new subsidized subscription tier’s price. Regardless, the move will position the platform among the many streaming services providers that already offer a cheaper, ad-supported subscription plan like WarnerMedia, Discovery, and Paramount Global.
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Currently, Disney+ is one of three primary services that do not yet offer a subscription backed by ads – the other two being Netflix and Apple TV+.
By targeting a lower price point, Disney aims to reach the milestone of 230 to 260 million paid subscribers by 2024, which will allow the company to reach profitability.
The service successfully debuted in mid-November 2019 and gained over 10 million individual subscriptions within the first 24 hours since opening. One and a half years later, the service reached the 100 million subscriber mark during the pandemic. Growth, however, has substantially slowed down with the return to social living.
Disney+ offers an extensive content catalog with a mix of original programming and classics from studios like Pixar, Marvel, and Lucasfilm. The service’s current price plan is $8 per month for its ad-free paid subscription tier.
Ad-supported plans on other streaming service provider platforms like Discovery+ and Paramount+ currently cost $4.99 per month. Disney’s own Hulu streaming service also offers an ad-supported plan in the US at the price of $6.99 per month.