Disney+ announced a cheaper ad-supported tier in its streaming service to help increase its growing subscriber base.
The new ads tier will join the subscription option in the United States later this year, but the company has not disclosed any other details. They only said that the exact launch date and pricing will be announced at a later time, together with an international expansion in 2023.
In a statement, Disney Media and Entertainment Distribution chairman Kareem Daniel said, “Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone.”
He explained, “More consumers will be able to access our amazing content. Advertisers will be able to reach a wider audience, and our storytellers will be able to share their incredible work with more fans and families.”
The ad-supported tier is a “building block” in the company’s goal of reaching 230 million to 260 million long-term subscribers by 2024.
Disney+ reached 130 million subscribers as of January 1. Consequently, it became one of the biggest competitors in the streaming market. Disney+ now joins services like Paramount+, NBC’s Peacock, and WarnerMedia’s HBO Max with a cheaper ad-supported tier.
The streaming leader Netflix has been vocal about not adding an ads tier. Netflix has nearly 222 million subscribers.
However, for Disney, a cheaper ad-supported tier may help offset high content costs and encourage the rapid growth of the company’s most important asset.
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