Disney+ launches ad-supported tier with 100+ advertisers

Dive Brief:

Disney on Dec. 8 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 bundles 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 amid speculation of upcoming consolidation and mergers among streamers.

Dive Insight:

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

Despite the 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, as well as competition from other apps like YouTube, Twitch and TikTok being an issue for streamers. Disney said recently that Disney+’s growth may slow going forward.

Not only are some consumers likely to balk at adding another subscription, macroeconomic factors may push consumers to actually cut back on their streaming budgets, ad-supported or not. While Disney’s $7.99 basic package might be low enough to keep some subscribing, the $69.99 for ad-supported streaming and live TV may be a bit much to ask. Netflix said this week that it will likely expand beyond the one ad-supported tier it currently offers in the future, which will put additional pressure on subscription budgets.

At a time when advertisers are demanding accountability for their media spending, demonstrating verifiable results is critical, Disney will need to be transparent about how it will report results to advertisers on Disney+. Though Disney had said it was working with more than 100 vendors to serve clients’ 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 Advertising Sales did announce a partnership with Standard Media Index last year to understand its revenue and audience better. Recently, Disney said it is enhancing its existing data clean room technology by integrating VideoAmp’s advertising measurement, planning and optimization tools. Disney Advertising and The Trade Desk have also expanded their partnership to integrate Disney’s Audience Graph with Unified ID 2.0 using Disney’s clean room technology.

The ad-supported plans start at $7.99 per month. The lowest cost ad-supported tier includes access to the full content catalog and product features, such as creating up to seven profiles, concurrent streaming on up to four devices and high-quality video formats, as those subscribing to the company’s Premium subscription (which increases to $10.99/month). The 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, as well as Live TV).