Disney Plus Ad-Supported Plan Surges: A Pricing Change and Global Expansion

  • Disney Plus's ad-supported plan, introduced less than a year ago, now attracts 50% of new subscribers in the US, with a lower monthly cost.
  • The ad-supported plan's pricing strategy aims to boost adoption, keeping prices steady while raising the cost of the ad-free plan.
  • Disney's international expansion includes the UK and several European countries, offering the ad-supported plan, increasing accessibility worldwide.

Disney Plus has made a significant impact on the streaming service landscape with its ad-supported plan. Launched less than a year ago, this subscription option has quickly gained popularity, not just in the United States but also in South Africa. From March to September 2023, 50 percent of new Disney Plus subscribers in the United States chose the more affordable ad-supported plan over the ad-free alternative. This growing preference for the ad-supported tier reflects a larger trend in the streaming industry, where consumers are seeking cost-effective alternatives.

Price Strategy and Subscriber Preferences

In a strategic move, Disney decided to keep the price of the ad-supported plan unchanged while raising the cost of the ad-free subscription. Disney CEO Bob Iger explained this decision during the company’s last earnings call in August, stating, “We’re actually keeping the advertiser-supported product flat in terms of prices. We’re obviously trying with our pricing strategy to migrate more subs to the advertiser-supported tier.” This pricing strategy appears to have paid off, with a significant portion of new subscribers opting for the ad-supported plan.

Here’s a breakdown of the pricing for Disney Plus in the United States:

Plan TypeMonthly Price (USD)
Ad-Supported$7.99
Ad-Free$13.99

Additional Revenue from Ads

One might wonder why Disney is keen on driving subscribers to the more affordable tier. The answer lies in the additional revenue generated through advertisements. The ads shown to subscribers on the ad-supported plan contribute to Disney’s average revenue per user (ARPU), similar to what streaming giant Netflix has observed with its own ad-supported tier. This revenue stream is increasingly becoming a vital component of Disney’s streaming service strategy.

International Expansion

The success of the ad-supported plan in the United States has encouraged Disney to expand this option to international markets. Starting on November 1, 2023, Disney Plus will introduce the ad-supported plan to Canada and several European countries, including the United Kingdom, France, Germany, Italy, and others. This expansion indicates Disney’s commitment to promoting the ad-supported tier on a global scale, making it accessible to a broader audience.

South African Impact

While the article has primarily focused on developments in the United States and international expansion, it’s essential to consider how these trends might affect South African subscribers. Though not explicitly mentioned in the provided information, South African Disney Plus users are likely to see the same pricing strategy applied when these options become available.

South Africa has a growing Disney Plus subscriber base, and this pricing strategy may appeal to cost-conscious consumers in the country. The ad-supported plan offers an opportunity for viewers to enjoy their favourite Disney content at a reduced monthly cost, potentially making the service more accessible to a broader audience.

Future Reports and Tackling Password Sharing

In the coming months, Disney is expected to provide more insights into the performance of the ad-supported tier in its fourth-quarter earnings report. This report will likely shed light on the adoption rate of the ad-supported plan, revenue generated from advertisements, and the impact of the international expansion.

Additionally, Disney is actively exploring ways to address password sharing, which has been a concern for streaming services globally. The company’s strategies to tackle this issue will be of interest to South African subscribers, as they may influence access and usage policies in the region.

Conclusion

Disney Plus’s ad-supported plan is on the rise, gaining popularity among subscribers both in the United States and, soon, in several European countries, including the UK. Disney’s pricing strategy, which keeps the ad-supported plan more affordable than the ad-free alternative, has proven effective in attracting a substantial number of subscribers.

The international expansion of the ad-supported plan on November 1, 2023, presents a new opportunity for South African viewers to embrace a more cost-effective way to access Disney’s extensive content library. As the streaming landscape continues to evolve, Disney’s strategies and innovations will shape the future of entertainment consumption, both globally and in South Africa. Keep an eye out for Disney’s upcoming earnings report and its plans to tackle password sharing, as they could have a significant impact on streaming in the country.

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