Effective December 8, the much-anticipated ad-supported streaming plan of Disney+, called Disney+ Basic, is now available in the U.S. The ad-supported subscription plans are available to new subscribers at $7.99 a month. Premium subscribers who pay $10.99 a month or $109.99 a year can downgrade for the new price, but they will have to sacrifice their ad-free viewing.

“Today’s launch marks a milestone moment for Disney+ and puts consumer choice at the forefront,” said Michael Paull, president of Direct to Consumer for Disney, in a December 8 news release. “With these new ad-supported offerings, we’re able to deliver greater flexibility for consumers to enjoy the full breadth and depth of incredible storytelling from The Walt Disney Company.”

What this means for Disney+ Basic subscribers

Though Disney+ Basic subscribers will see ads, they have access to Disney’s complete catalog of content and features available to Disney+ Premium subscribers:

• Content: exclusive originals and thousands of titles, including films, documentaries, series and shorts including movies and shows from Disney, Pixar, Marvel, Star Wars and National Geographic
• Profiles: up to seven profiles per account which can use PINs and content ratings by profile to restrict access through parental controls
• Concurrent view: subscribers can stream on up to four devices at the same time
• High-quality video formats including 4K Ultra HD, Dolby Vision, Full HD, HDR10 and Expanded Aspect Ration with IMAX Enhanced. Disney has more than 300 titles in 4K UHD and HDR.

Disney+ Basic subscribers will not have unlimited downloads on up to 10 devices, Groupwatch or Dolby Atmos, according to Disney+ FAQs.

Pricing across Disney-owned direct-to-consumer subscription services

Disney, Hulu and ESPN have all raised their prices this year. Their current prices – as of December 8 – are as follows.

Advertising

Twitter’s loss may be Disney’s gain. While Twitter is reportedly losing advertisers, Disney is finding them. The company said they have more than 100 advertisers across top categories (e.g., retail, apparel, autos, financial services, restaurants, technology, travel) at launch. Among the brands and agencies Disney is working with are Dentsu, Havas, Horizon, IPG, Omnicom Group, Publicis, RPA, Stagwell and WPP.

 “Today we welcome Disney+ with ads to the largest, most diverse and impactful portfolio in the industry,” said Rita Ferro, president, Disney Advertising. “We are committed to connecting our clients to the best storytelling in the world while delivering innovation and viewer-first experiences in streaming now and in the future.”

Insider Take

Most of the top streaming subscription companies (e.g., Netflix, HBO Max, Hulu, Disney) now have an ad-supported tier. Why is this business model so popular right now? Consumers are cutting their spending because of an uncertain economy and inflation and, streaming services while desirable, are a nonessential expenses. Many households have multiple streaming services, and to afford to have more streaming services, they are willing to watch ads to save a few bucks a month.

On the heels of Netflix’s ad-supported offering, Disney will likely be successful with this tier because it is more accessible to more budgets. However, they are providing consumers with a lot of choices and their constantly changing plans and pricing might be confusing. Once they settle on a price point that works for Disney AND for consumers, they should stick with it to avoid churn.