Earlier this year, rumors pointed to an ad-supported Disney+ tier, which would presumably make the service more affordable for people. On Wednesday, Disney confirmed its plans to launch a new ad-supported tier during a call with investors. However, despite the new subscription plan, Disney+ is getting more expensive in the United States.
Currently, the Disney+ subscription costs $7.99 per month. While the company will keep this same price on its basic plan, it is now introducing advertisements for these users. Meanwhile, those who want to continue having an ad-free experience on Disney+ will have to pay $10.99 per month – a price increase of 37.5%.
According to Disney, the ad-supported tier of Disney+ will have exactly the same content available in the more expensive tier. The company also notes that not all content will have advertisements, at least for now. Viewers are expected to watch four minutes of advertising every hour of content. Most ads will be 15 to 30 seconds long.
Hulu, which is a streaming platform owned by Disney, is also getting a price increase. Hulu’s basic ad-supported subscription will rise from $6.99 to $7.99 per month, while the ad-free plan will go from $12.99 to $14.99. The subscription to ESPN+, another Disney streaming service, will increase from $6.99 to $9.99 per month.
Disney reported strong results for its fiscal 2022 third quarter, with $21.5 billion in revenue. When it comes to its streaming platforms, Disney+ alone totaled 152.1 million paying subscribers as of July 2.
However, as noted by CNBC, Disney+, Hulu, and ESPN+ combined lost $1.1 billion during the quarter. That’s because the cost of content has gotten more expensive while customers are also looking for cheaper “multi-product offerings.” Still, Disney hopes to reach even more consumers with its bundles that include Disney+, Hulu, and ESPN+.
It’s worth noting that Disney+ is not the only platform working on an ad-supported tier. Earlier this year, Netflix confirmed that it will have a more affordable subscription plan thanks to advertisements and a partnership with Microsoft. However, unlike Disney+, Netflix’s ad-supported tier won’t provide access to the platform’s full catalog.
According to Disney, the new Disney+ subscription plans will go into effect on December 8. It’s unclear at this point how the new prices will affect other markets besides the United States.
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