Disney+ Ad-Supported Tier Officially Announced

Disney has now confirmed the rumors we reported on just yesterday — the company is officially planning to introduce an ad-supported subscription plan. The new Disney+ plan will allow subscribers to watch all of the same content that is available to higher tiers but at a lower cost. However, these users will have to sit through an undisclosed number of ads in order to make up for the lower monthly payment.

Running an ad-supported plan has its benefits both for Disney and for the people who may choose to subscribe to it. For Disney, this opens the door to potentially highly lucrative advertising contracts which, according to the company, are in very high demand. As the ads are supposed to be "contextually relevant to viewers", there is a good chance of scoring successful sales.

"Since its launch, advertisers have been clamoring for the opportunity to be part of Disney+ and not just because there's a growing demand for more streaming inventory. Disney+ with advertising will offer marketers the most premium environment in streaming with our most beloved brands," said Rita Ferro, president of Disney's Advertising Media and Entertainment Distribution department. This implies that the company may have a line of willing brands waiting to buy their way into Disney+.

Disney has a big long-term goal

Although it's never fun to be interrupted mid-episode or a movie with a long string of ads, many of us are already used to just that through watching television. One of the benefits of choosing a streaming service over cable has, traditionally, been the fact that there are no ads. However, the ability to pay less while still having access to Disney's robust library could potentially draw in a lot of new users. Disney+ wins on every front here, of course, both on extra subscriptions and advertising deals, but this is a good deal for budget-conscious customers, too.

It's worth noting that Disney+ owns Hulu, yet another streaming service that offers an ad-supported subscription tier with great success. It certainly indicates that customers are willing to sit through ads, if it gets them access to their favorite content. With that said, Disney+ is not the most expensive streaming platform on the block to begin with — at $7.99 a month, it's cheaper than most of its competitors, including Netflix and HBO as well as Disney's own Hulu service.

With that price tag, it's hard to imagine how cheap Disney's new "with ads" plan is going to be. The company hasn't disclosed when exactly to expect the new subscription tier just yet, or how much it's going to cost. Disney hopes that the ad-supported subscription system will help it achieve its long-term goal of hitting up to 260 million Disney+ subscribers by the end of 2024.