When Disney first announced the launch of their Disney+ service in 2020, two things were clear -- they had extremely high subscriber goals, and, they had no plans for an ad-supported experience.
As of today, only one of those two things remain true. By fiscal 2024 Disney has a goal of 230 million to 260 million in total subscribers, but won't get there on a paid-only version alone. They've recently announced that beginning in late 2022 the customers will announce a new tier of their subscription access which is ad-supported for a to-be-announced price point.
This announcement makes it incredibly clear that the battle for subscribers and the pressure from investors is incredibly high, especially in the face of stark competition. Comcast Corp.’s NBCUniversal offers its Peacock Premium streaming service with ads for $4.99 month, or $9.99 without. Paramount Global and Discovery Inc. each offer two tiers of their Paramount+ and Discovery+ services, with ads and without, also for $4.99 and $9.99 a month, respectively.
Personally, I think the move is a good one. As consumers begin to see the light at the end of the tunnel for their quarantine lifestyles, many are looking at their monthly budgets and wondering if they still need to pay for a certain streaming service, especially if their favorite show is in-between seasons. Disney can continue to lay claim to families who want to give their kids access to endless hours of child-friendly entertainment, but as their targets climb higher and higher, they must provide a pricing model to consumers who would only consider subscribing for access to the Mandolorian.
From an advertiser's point of view, this is of course welcomed news. Disney represents a large captive audience and an untapped one until now. With new customers hopefully coming on to the ad-supported version and existing ones potentially downgrading, the opportunity is quite large. Of course, marketing to children can represent challenges and streaming may not have the most captive audience compared to platforms, but competitors have certainly proven that the value is there.
https://www.wsj.com/articles/disney-to-roll-out-cheaper-ad-supported-subscription-in-late-2022-11646405231?st=ikvo5mxrwrleyww&reflink=share_mobilewebshare
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