Disney+ to offer ad-supported subscription tier

Disney+ will offer a cheaper, ad-supported streaming subscription tier that will roll out in the United States in late 2022 and internationally in 2023 as the entertainment behemoth looks to boost its subscriber growth. 

"Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone - consumers, advertisers, and our storytellers," Disney Media and Entertainment Distribution Chairman Kareem Daniel said in a statement. "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."

Rita Ferro, Disney Media and Entertainment Distribution's advertising president, added that she would share more details with advertisers at the company's Upfront event in New York City on May 17. 

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Disney said the new offering is viewed as a "building block" to achieving its long-term target of 230 million to 260 million Disney+ subscribers by 2024. 

Ticker	Security	Last	Change	Change %
DIS	THE WALT DISNEY CO.	96.21	+1.12	+1.18%

Since its launch in November 2019, Disney+ has reached a total of 129.8 million subscribers, including 11.8 million new subscribers added in the first quarter of 2022. Meanwhile, Hulu and ESPN+ have reached a total of 45.3 million and 21.3 million subscribers, respectively, bringing the total number of subscribers across Disney's streaming portfolio to 196.4 million.  

Disney+'s ad-free plan currently costs $7.99 per month. Meanwhile, the Disney Bundle, which includes access to Hulu and ESPN+, is available for $13.99 a month with ad-supported Hulu and $19.99 per month with ad-free Hulu. Details about specific launch dates and pricing for the ad-supported Disney+ plan will be revealed at a later date. 

Hulu currently offers an ad-supported basic plan for $6.99 per month, or $69.99 per year, and an ad-free basic plan for $12.99 per month. Hulu's bundle, which includes its Live TV package, Disney+ and ESPN+, costs $75.99 per month without ads and $69.99 per month with ads. ESPN+'s standard plan costs $6.99 per month, or $69.99 per year. 

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Disney's major rivals, Netflix and Amazon, do not offer ad-supported streaming plans. Netflix, which currently has 221.8 million total subscribers worldwide, charges between $9.99 and $19.99 per month for its plans.  

Amazon, which does not disclose its total Prime Video subscriber numbers, charges $8.99 per month for Prime Video membership. Prime Video is also included with free two-day shipping in the standard Amazon Prime plan for $14.99 per month or $139 per year. Amazon Prime memberships are also available for students for $7.49 per month or $69 per year and EBT, Medicaid and other select government assistance recipients for $6.99 per month.

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PARA	PARAMOUNT GLOBAL	10.94	+0.28	+2.63%

Meanwhile, Comcast and NBC Universal-owned Peacock, which has over 9 million paid subscribers, charges $4.99 for its ad-supported plan and $9.99 for its ad-free plan. AT&T, which has 73.8 million subscribers across HBO Max and HBO, charges $9.99 per month or $99.99 per year with ads and $14.99 per month or $149.99 per year without ads. 

Paramount Global, which has 32.8 million Paramount Plus subscribers, charges $4.99 per month or $49.99 per year with ads and $9.99 per month or $99.99 per month without ads. Discovery, which has 22 million paid subscribers across its direct-to-consumer video services including Discovery+, charges $4.99 per month with ads and $6.99 per month without ads.