Disney+ Tipped In Talks To Launch Cheaper Ad-Supported Plan

Despite being one of the cheapest streaming services on the market, Disney is reportedly looking to cut its Disney+ price in the US, potentially opening the door to more subscribers as a result. The company is allegedly in talks about rolling out an ad-supported plan, which would show viewers advertisements in exchange for a lower monthly price. A similar option is already offered by Disney's Hulu, one of the two extra streaming services available with the Disney+ bundle.

Details about the alleged plan were published by The Information, which cites "a person involved in the discussions." Disney hasn't announced an ad-supported plan at this time and, as expected, the company hasn't commented on the report. Though it's possible Disney may decide to skip a cheaper plan subsidized by advertisements, it wouldn't be surprising to see this kind of option launch in the US. Many competing services have similar business models, though Netflix remains the big exception, electing to continue raising its prices rather than open the door to ad revenue.

Ad-supported plans are a popular option

Disney+ initially launched in the US for $6.99 per month, later increasing to its current $7.99 per month rate. This makes the service cheaper than Netflix's "Basic" $9.99 per month tier, Hulu's "No Ads" $12.99 per month plan, and HBO Max's "With Ads" $9.99 per month plan. Despite the lower cost, the company may launch a more affordable plan to fuel subscriber growth.

The sources didn't reveal how much this ad-supported plan may cost nor whether similar plans may be introduced in other markets. Hulu's "With Ads" tier is priced at $6.99 per month, which was the same price tag on the Disney+ service when it first launched. In light of this, it seems reasonable to assume an ad-supported Disney+ plan may slightly undercut Hulu, which could push the price down to around $5.99 per month — though that remains to be seen.

Ad-supported plans have proven popular among consumers who have seen the number of services available to them skyrocket — and with that change, a greater fragmentation across the streaming industry. Original shows and a growing number of streaming platforms mean many consumers must sign up for multiple different services in order to watch their favorite shows, driving prices up to levels that may be similar to what they were paying for traditional pay-TV services.

Cheaper plans that include commercials address this issue by making it possible to access a platform's content library for what is typically less than $10 per month. Peacock notably embraced this business model, billing itself as a free service that includes a $4.99 per month premium tier with access to its full content library. It's possible that an ad-supported Disney+ subscription may not prove very popular, however, due to the platform's already low price.