This week we’ve seen Disney launch their ad-supported tier for Disney+, bringing them into alignment with the other key movements we’ve seen in this space this year. In order to accommodate the new tier, they’ve also made some significant changes to their other tiers. Brandon Blake, our resident entertainment lawyer from Blake & Wang P.A, has all the details.
New Bundles and Tiers
While the standard Disney + tier (ad-free) remains the same in principle, it’s had a price increase to $10.99 a month, with the new AVOD tier, Disney+ Basic, sliding into its place at $7.99 a month. A new bundle offering, packaging Hulu and ESPN+, will now also start at $9.99 a month. The existing Disney Bundle (Disney+, Hulu, and ESPN+) has also been revised into separate offerings. The Disney Bundle Duo (AVOD Disney+ and Hulu) will now be on offer for $9.99 a month, while Disney Bundle Trio Basic brings the ad-supported tiers for all three services to the table at $12.99. The Disney Bundle Trio Premium, of course, brings all three of the non-ad-supported tiers to the table for $19.99. There’s also Hulu’s Live TV plan to consider, with the ad-supported tiers of each on offer for a meaty $69.99 monthly.
The Disney+ Basic tier is a very limited one, too. Alongside the ads, there’s many disabled features- think no downloads, and the removal of extras like Dolby Atmos and GroupWatch.
A Swing to Profit?
The launch of ad-supported tiers on previously ad-free networks is not a new story for the year. We’ve seen almost every streamer that didn’t offer an AVOD tier embrace the idea. However, this launch will be a critical one for Disney itself, who desperately need a way to bring Disney+ into profitability after massively restructuring the company around the streaming model at the end of last year.
For the launch, we know they have over 100 advertisers signed on, across a variety of categories. Interestingly, they’ve also highlighted a wish to avoid a problem we’ve seen with the increase in ad-supported streaming: repetitive ad spots.
Of course, they’re not new to the overall ad-supported game, with Hulu and ESPN+ having both operated in the space for years. No doubt this experience with advertising infrastructure, alongside the pulling power of the Disney brand, will make the new addition a desirable one for brands looking to partner with streaming services.
It will certainly be interesting to see how Disney’s new bundles and tiers perform alongside the Netflix version, which we saw launched a few weeks ago. Unlike Disney, Netflix stuck to one ad tier, although we expect an expansion on that in the future.
Are ads really the streaming path of the future? Or are we seeing a frenzied scramble to try and sustain a streaming market that did rather bubble and near-burst rather fast? For now, it’s too early to tell, with most of the highest-traction brands only recently stepping into the space. It will certainly be an interesting experiment to watch, however.
