- Disney announced a new ad-supported tier for its Disney+ streaming service on Friday.
- Disney did not provide a launch date or price for the new tier, but said it would come later this year.
- Adding an advertising-support tier will allow Disney to boost average revenue per user — a metric that currently trails most rivals.
Disney announced on Friday a new ad-supported tier for its Disney+ streaming service that will launch in the U.S. later this year.
Disney did not provide a launch date or price for the new tier. The new ad-supported tier will expand internationally in 2023.
The company said in a press release that the new offering would be "a building block" in achieving its goal of reaching 230 million to 260 million Disney+ subscribers by 2024.
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Adding an advertising-support tier will allow Disney to boost average revenue per user — a metric that currently trails most rivals. Comcast Chief Executive Officer Brian Roberts said last quarter NBCUniversal's Peacock had ARPU of nearly $10 per month per user, driven largely by advertising. The average revenue per user per month for Disney+ in the U.S. and Canada was $6.68 last quarter.
WarnerMedia's HBO Max, Paramount Global's Paramount+ and Discovery's Discovery+ are among the streaming services that already offer advertising-supported streaming options.
Hulu, majority owned by Disney, also already offers an ad-supported product for $6.99 per month, compared with its ad-free service, priced at $12.99 per month. Disney is streamlining backend technology to enable selling advertising on all of its streaming products, according to a person familiar with the matter.
Money Report
Disclosure: Comcast is the owner of CNBC parent company NBCUniversal.
