- Disney discussed the business plans regarding the profitability of its Disney Plus streaming service.
- Reportedly, the company is taking into account introducing a new tier in the United States.
- This new plan would include commercials and would be available for a smaller subscription fee.
Rumor has it that Disney is considering introducing a new tier for its Disney Plus streaming service in the United States. Of course, this change would allow the company to increase profitability by raising the ad-free tier's price and attracting new customers with an ad-supported tier offered at a lower price than the current, single tier on the service.
According to a person involved in the discussions, this is the approach the media giant is considering as a means to hit its goal of profitability for its direct-to-consumer business in 2024 since the subscriber numbers boomed in the first year after its launch but slowed down considerably in the last years. They believe this step could restart subscriber growth for the service.
Disney would be joining the majority of entertainment companies such as WarnerMedia (HBO Max), Discovery (Discovery Plus), NBCUniversal (Peacock), and Paramount Global (Paramount Plus) that have added ad-supported tiers to their streaming services to remain relevant in an increasingly competitive segment. The fact that The Walt Disney Company adheres to this policy shows that companies shift the focus of video streaming away from the premium no-commercials services (like Netflix) model to a more accessible ad-supported model that resembles linear TV content.
At the moment, a Disney Plus subscription costs $7.99 per month or $79.99 per year in the United States, and it's even offered for free while bundled with other services such as Hulu Live TV. The introduction of a new tier following the recent example coming from other companies would mean increasing the price for the current ad-free tier and displaying a lower price for the future ad-supported one. Competing services such as Discovery Plus and Paramount Plus go as low as $4.99 per month for the commercials tier, and the no-ads tier goes as high as $9.99 per month, but we'll just have to wait and see.