Disney+ set to introduce ad-supported offering, will others follow?

Disney’s global streaming platform, Disney+ is set to introduce an advertising-supported subscription offering globally in 2023, after first being launched in the United States by the close of 2022.

The company put forward its plans for a cheaper offering, supported by ads at the end of last week, which will stand alongside its ad-free offering. Chairman of Disney media and entertainment distribution, Kareem Daniel said that expanding access to Disney+ to a broader audience at a lower price point “is a win for everyone – consumers, advertisers, and our storytellers”.

“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.”

Disney already owns two advertising-supported platforms, being Hulu and ESPN+, both are not available in Australia. Disney said that Hulu is a “pioneer and leader among all ad-supported video-on-demand subscription services”.

Currently in the Australian market, the only paid streaming platforms with advertising are Kayo and live sport on Paramount+. There are several free advertising-supported platforms from free-to-air networks, including SBS On Demand, 9 Now, 10 Play, and 7 Plus.

Paramount (formerly ViacomCBS) chief sales officer, Rod Prosser told the Unmade podcast at the end of 2021 that the company is set to launch its own advertising video on demand (AVOD) service, Pluto soon.

He said: “We will soon launch another AVOD service in this market. Obviously we’ve got a fairly significant AVOD service being Pluto TV that’s being rolled out globally, and that will equally play into it.”

Speaking to Mumbrella last year following the launch of Flash, Stream Motion CEO, Julian Ogrin said ad integration is in “its early days” on the platform, and that in order to build a proper strategy, “you’ve got to build an audience, find out the segments, the user data, what’s their behavior and what cohorts are there. And then you come up with an advertising strategy around it”.

He said that the company had “just started getting into that conversation with Kayo two years in”. and that Binge “will be up next”.

“Look, I’m probably letting the cat out of the bag a little bit here, but I’m not quite sure of the exact launch date, but one thing I can tell you is it’s coming and it won’t be too far off. We’re not talking years off. So, obviously we’ve got to get other things ready and right. But it’s certainly on its way to Australia at some point.”

Rita Ferro, president – advertising, Disney media and entertainment distribution, said: “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, Disney, Pixar, Star Wars, Marvel and National Geographic. I can’t wait to share more with advertisers at the Upfront.”

Disney said that the new offering is seen as a “building block” in the company’s path to its long-term term target of 230-260 million subscribers by FY24. More details on the official launch date and pricing will follow soon.

Disney+ originally launched in Australia in November 2019 at the price point of $8.99 per month. It is now $11.99.

Netflix confirmed it had no plans.

Netflix ANZ PR direction, Nathan Burman said: “We have no plans to introduce ads on Netflix (including on our games). We believe that our members should control what and how they watch – across devices and with no interruptions for ads.”

Stan was contacted regarding the possibility of an ad introduction locally, however had no comment to make.


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