Disney+ Rolls Out New Tier With Ads — Why It Is Not a Bargain for Existing Customers

Photo illustration in Brazil - 10 May 2022
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On Dec. 8, The Walt Disney Company launched its ad-supported subscription offering on Disney+. Customers now have the option to choose either the Basic plan for $7.99 per month or the Premium plan for $10.99 per month — an increase of $3.

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Disney+ offers three bundles with sister platforms, Hulu and ESPN+. The Disney Bundle Duo (Disney+ Basic and Hulu’s ad plan) is available for $9.99 per month and the Disney Bundle Trio Basic (Disney+ Basic, Hulu’s ad plan and ESPN+) will be $12.99 per month. The most expensive Disney Bundle Trio Premium costs $19.99 per month.

A Disney spokesperson told TechCrunch that ads will range from 15 to 30 or 45 seconds long, and the total ad load will be limited to an average of four minutes of advertisements an hour. Preschool content has zero ads.

“The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally,” Bob Chapek, Disney’s former CEO, said in a letter to investors last month, CNN reported. “We expect our [direct to consumer] operating losses to narrow going forward.”

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According to CNN, the company said that it sees the ad-supported tier “as a building block” in its goal of reaching 230 million to 260 million long-term subscribers by the 2024 fiscal year. However, while it may seem like Disney is offering a cheaper tier, subscribers are now paying the same price for a plan they had, but with advertisements.

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Research firm Kantar found that 23% of existing Disney+ subscribers plan to switch to the Basic tier, Deadline reported, which is about 37 million subscribers.

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
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