As the streamer wars enters its next big era, large providers like Netflix, HBO Max, and Disney+ are realizing that a lower-cost, ad-supported tier is a safe bet for subscriber growth and revenue potential. The Walt Disney Company has already confirmed that a cheaper subscription, with ads, is on the horizon for the home of The Mandalorian and Moon Knight, but how many ads can people expect to see on the service? Speaking in a new interview with The Wall Street Journal, Rita Ferro, Disney's president of ad sales and partnerships, confirmed details about this specific topic, including how many ad minutes per hour there will be.
When the ad-supported tier launches later this year on Disney+ it will start with "four minutes of commercials an hour" for users, almost twice as much as Hulu (which Disney also owns and operates). Disney also confirmed that not everything on the service will have ads though, as programming specifically targeted for preschool children will not have any commercials. According to the piece, Preschool children that have their own profiles won't see ads on the service at all. It's worth noting there are also more stringent guidelines and rules by the FTC with regard to advertising on children's television, but it's unclear to what extent that may be the reason for this decision by Disney.
"Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone – consumers, advertisers, and our storytellers," Kareem Daniel, Chairman, Disney Media and Entertainment Distribution, said in the initial statement about the ad-supported Disney+ option. "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."
It's unclear how the ad-supported tier on Disney+ will be price as the current service runs $7.99 a month or a $79.99 a year. For comparison's sake, Hulu's ad-supported tier is $6.99 a month and $69.99 a year with its ad-free tier running $12.99 a month. It's unclear if Disney+'s ad-free tier will raise its prices in response to the addition of a version with ads, though Disney CEO Bob Chapek did suggest that a price increase across the board could occur.
"Using some of our other services we can see the additive nature of an ad driven service that enables us to keep the price lower," Chapek said during the company's quarterly meeting last week. "Of course that's made up for by the additional revenue that we will get per user on the advertising spending. So we believe that we can, you know, sort of move up and cascade up our net price over time given the tremendous value that we started with, and the increased price value relationship, all of all the new content, but we're pretty bullish. about that."
Check back here for more details on the Disney+ tier with ads as we learn about it.