Disney’s boss has confirmed that the company is not planning to add a cheaper streaming option with ads to Disney+ becasue the streaming service is already priced very competitively.
STORY HIGHLIGHTS:
- Disney+ won’t be adding a cheaper, ad-driven tier.
- Disney+ launched in November 2019 at $7/month.
- In March 2021, the price went up to $8/month.
Disney+ not planning to add a cheaper, ad-driven tier
Speaking at the Credit Suisse 23rd Annual Communications Conference, Disney’s chief executive Bob Chapek has acknowledged that Disney+ isn’t currently planning to add ads to its streaming service anytime soon.
Here’s why Chapek said, according to a press release on the Disney website:
We’re always reevaluating how we go to market across the world, but we’ve got no such plans now to do that. We’re happy with the models that we’ve got right now. We won’t limit ourselves and say no to anything. But right now, we have no such plans for that.
Disney+ launched in November 2019 featuring a vast content library of shows, movies and animated films in exchange for $7/month, which increased to $8/month in March 2021.
We did launch at a very attractive price-value opening point. The first price increase that you mentioned in the first 16 months happened recently, and we’ve seen no significantly higher churn because of that.
He has a point, Disney+ is great value indeed.
How Disney+ survived boosting the subscription price
The price increase didn’t hurt Disney’s subscription numbers because Disney+ offers a rich content library at a very aggressive price, but that doesn’t mean value proposition won’t change down the road. Right now, Disney+ is growing but there will come a time when growth will decelerate. Also, expect additional price hikes as the service keeps expanding its library.
Which is to say that, inevitably, there will come a time in a not-so-distant future when Disney will have to introduce a cheaper option with ads to prevent subscriber churn.
Why Disney+ doesn’t need to go ad-supported
But why wouldn’t Disney+ offer advertising in exchange for a lower subscription price, especially with Hulu, HBO Max and others offering ad-supported tiers at lower prices?
When you think about it, Mickey Mouse House doesn’t really need to go down that route because its current offering and subscription price already undercut major streaming competitors except for Apple (but Apple has the poorest selection of content so no wonder Disney’s CEO isn’t concerned at all about Apple TV+ undercutting Disney+).
On top of that, Disney+ has perhaps the strongest content when it comes to families. And of course, no other service comes close in terms of powerful entertainment brands that Disney owns, like Star Wars and Marvel.
Disney+ surpassed 100 million subscribers in June 2021 and recently released “Black Widow” and “Cruella” on Disney+ as $30 Premiere Access titles alongside their theatrical releases.