Disney+ considering less expensive ad-supported tier to attract subscribers
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Disney is reportedly considering a cheaper, ad-supported tier of its Disney+ streaming service to boost profitability amid slower subscriber growth.
It isn't clear how much the cheaper Disney+ tier will cost or when it could launch, with the plan currently only in the discussion phase, according to a new report from The Information. A launch would come to the U.S. before other regions, the report claimed.
The move comes amid slowing subscriber growth for Disney+. The streaming service has enjoyed massive growth since its launch, accumulating 100 million subscribers in the 16 months after its November 2019 debut.
During the quarter ending Jan. 1, Disney+ said its subscriber number had hit 130 million, up 11.9 million from the prior quarter. An ad-supported option could help the service increase revenue by attracting a wider group of subscribers.
The addition of an ad-supported tier would make Netflix and Apple TV+ the only major streaming services without such an option. Other companies that have added ad-supported subscriptions include WarnerMedia, Discovery, NBCUniversal, and Paramount Global.
Disney's own Hulu streaming service also offers a cheaper ad-supported tier that " rel="sponsored" target="blank">costs $6.99 a month
" rel="sponsored" target="blank">costs $6.99 a month. Disney+ currently runs $8 a month.
It wouldn't be the first option Disney has tried to foster growth. In December, the company began requiring customers signing up for Hulu Live to also take Disney+ and ESPN+. That move helped Disney increase its Disney+ growth rate to 11% in its most recent quarter, up from growth of 2% to 3% in the previous four.