Disney+ promises light ad load and zero commercials for preschoolers at new ad-supported tier • TechCrunch
The Walt Disney Company announced two months ago that it would offer an ad-supported tier. While questions remain about the plan, such as pricing and launch date, we now know that Disney+ is keeping the number of ads to a minimum. Today, The Wall Street Journal reported that Disney+ promises to limit its overall ad load to an average of four minutes of commercials per hour. Preschool programming will also have no commercials whatsoever. Disney confirmed this to TechCrunch, adding that the lighter ad load and no advertising for preschool content will be the plan for the initial launch.
Disney+ will have fewer ads than sister service Hulu’s ad-supported tier, which shows ads for almost twice as long (about 7.4 ads). The Peacock service has about five minutes of commercials per hour, and HBO Max has no more than four minutes of ads per hour. Hulu was once known as the go-to AVOD (advertising video on demand) service; However, ot is now the company with the highest number of ads per hour. Peacock and HBO Max have the lightest commercial loads, according to MediaRadar. Consumers watching traditional TV will typically get between 18 and 23 minutes of advertising per hour, per Kantar data.
Rita Ferro, the Walt Disney Company’s president of ad sales, said: “We will never collect data on individual children to target them.” Preschoolers who use their own profile to view the ad-supported Disney+ tier will not see any ads. Disney+ has content that is considered brand safe, which is very attractive to advertisers.
While we don’t yet know the cost of the ad-supported version of Disney+, we do know that Disney executives indicated during the company’s recent earnings call that there will most likely be a price increase to the ad-free tier, which currently stands at $7.99 a month, when a less expensive, ad-supported alternative was made available to viewers.
Since the company will launch its cheaper ad-supported subscription plan later this year, following Netflix’s rollout of its own ad-supported tier, the two platforms will be compared more than ever before. It will be interesting to see how many ads Netflix chooses to show and which brands want to appear alongside Netflix content, which is less “brand safe”. Netflix revealed 221.6 million subscribers in its latest quarterly report, while Disney+ had 137.7 million.
The Wall Street Journal also reported that ad buyers said Disney+ wants to charge advertisers roughly $50 to $60 CPM (cost per thousand). This price range is apparently in line with other major streamers, according to ad buyers. The Wall Street Journal wrote that “Disney declined to comment on pricing.” Spending on TV advertising (streaming, national and local TV) in the US is expected to grow 6% to $74.2 billion in 2022, according to GroupM estimates.
The report comes as Disney prepares for its annual upfront event in New York City later this afternoon. According to Ferro, the event will be “unlike anything you’ve ever seen.” This is the company’s opportunity to reveal its advertising strategy for Disney+ as well as new programming coming to Hulu and ESPN+. There will most likely be news on ABC and ESPN beforehand as well.
Update, 5/17/22, 12:55 PM Updated with Disney providing TC with additional information.