Disney+ launches ad-supported tier with over 100 advertisers

Dive card:

• On Dec. 8, Disney launched an ad-supported option for its Disney+ streaming service, the entertainment company said in a press release provided to Marketing Dive.
• More than 100 companies – including P&G, Target and Starbucks – have agreed to advertise on the platform as well as all the major agency holding companies, including Dentsu, Havas, Horizon, IPG, Omnicom, Publicis, RPA, Stagwell and WPP.
• Several different ad-supported packages, including Disney+ Basic, will be available, starting at $7.99 per month. Disney+’s entry into ad-supported streaming comes just weeks after Netflix launched its ad-supported pricing tier. These changes come in the middle speculation about upcoming consolidation and mergers among streamers.

Diving Insights:

When you are a big brand, you can attract big brands. Disney said earlier this year that ad-supported streaming would come to Disney+ in late 2022. The strategy’s arrival with a veritable who’s who of major brands attached underscores the power of the Disney brand. Nearly every category is represented among Disney+’s first advertisers, from CPG to travel and QSRs to home improvement.

Despite its extensive roster of blue-chip advertisers, Disney+’s foray into ad-supported streaming comes with challenges. First, the field is getting crowded with other streamers like HBO Max and Netflix offering their own ad-supported options, plus competition from other apps like YouTube, Twitch and TikTok is a problem for streamers. Disney recently said that Disney+’s growth may slow going forward.

Not only are some consumers likely to do so avoid adding a new subscription, macroeconomic factors may push consumers to actually cut their streaming budgets, whether supported by ads or not. While Disney’s $7.99 base package might be low enough to keep some subscriptions, $69.99 for ad-supported streaming and live TV might be a bit much to ask. Netflix said this week that it is likely to expand beyond the one ad-supported tier it offers in the future, putting further pressure on subscription budgets.

At a time when advertisers are demanding accountability for their media spend, demonstrating verifiable results is essential, Disney needs to be open about how it will report results to advertisers on Disney+. Although Disney had said it was working with more than 100 vendors to serve customers’ specific measurement needs at its Tech & Data Showcase last March, no measurement companies were named in the latest release about ad-supported Disney+ tiers. Disney ad sales announced a partnership with Standard Media Index last year to better understand revenue and audience. Recently, Disney said it is improving its existing data cleanroom technology with integration of VideoAmp’s advertising measurement, planning and optimization tools. Disney Advertising and The Trade Desk have also extended their collaboration to integrate Disney’s Audience Graph with Unified ID 2.0 using Disney’s cleanroom technology.

The ad-supported plans start at $7.99 per month. The lowest ad-supported tier includes access to the full content catalog and product features, such as creating up to seven profiles, simultaneous streaming on up to four devices, and high-quality video formats, like those who subscribe to the company’s Premium plan (which increases to $10.99/month) . Tiers increase to $9.99/month (Disney+ with ads, Hulu with ads), $12.99/month (Disney+, Hulu and ESPN+, all with ads) and $69.99/month (Hulu, Disney+ and ESPN+, all with ads , in addition to Live TV).