Disney+ With Ads Announces Price Increase
Disney is already increasing the price to the ad-supported tier of Disney+. Wednesday, Disney chief Bob Iger made the announcement during the company's latest earnings call. Disney+ Basic, as the ad-supported tier is called, launched last December at $7.99/month while the platform's ad-free service is available at $10.99. It's unclear how much the ad-supported tier will cost after the price increase, nor is it known if the ad-supported change will impact the pricing involved with the ad-free service.
The price increase comes amid announcements Disney is adding Hulu programming to Disney+ by the end of the year, a move Iger lauded as supremely beneficial to advertisers currently spending money with the company.
"While we continue to offer Disney+, Hulu and ESPN+ as standalone options, this is a logical progression of our DTC offerings that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience," Iger said on the earnings call.
Why does Disney+ have ads?
The introduction of advertisements on streaming platforms has increasingly become the norm amongst direct-to-consumer providers as a way to simultaneously make more money through ads, as well as creating a cheaper option for those wanting to subscribe to the service by offering a cheaper subscription level.
"Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone – consumers, advertisers, and our storytellers," then-Disney Media and Entertainment head Kareem Daniel last August. "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."
Even with the addition of an ad-free tier, Disney+ has lost subscribers. Ahead of Wednesday's earnings call, the Mouse unveiled Disney+ has lost "millions" of subscribers.
"We're pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we've been making throughout the company to realign Disney for sustained growth and success," Iger said in a statement announcing the losses. "From movies to television, to sports, news, and our theme parks, we continue to deliver for consumers, while establishing a more efficient, coordinated, and streamlined approach to our operations."