Amidst a backdrop of declining profits, Disney+ has announced its plans to introduce an ad-supported streaming option to its UK subscribers in November. This innovative move, already operational in the United States, is set to expand its reach across Europe and Canada as well.
In response to market demands and shifting trends, Disney+ is offering a budget-friendly tier, priced at £4.99 per month, featuring adverts between content. However, current subscribers are slated to face a price increase of £3 per month to retain their existing benefits. The decision to tackle password sharing is also on the table, echoing Netflix’s efforts in a bid to optimize subscriber engagement.
The entertainment behemoth is confronting a range of challenges, including lackluster film performance and a notable dip in advertising sales within its traditional television domain. Notwithstanding a 4% year-over-year revenue growth for the quarter ending July 1st, the company reported a significant loss of $460 million, in stark contrast to the $1.4 billion profit achieved during the same period the previous year.
Disney to expand ads on streaming as business flags https://t.co/NoETKn35Wa
— BBC News (UK) (@BBCNews) August 9, 2023
The UK, which currently enjoys a solitary pricing tier of £7.99 per month, is set to witness the introduction of three distinct tiers come November:
Standard with Ads: Priced at £4.99 per month, this tier will offer 1080p video quality and extend simultaneous access to two devices.
Standard: Maintaining the £7.99 monthly charge, this tier provides the same benefits as the previous tier but excludes ads. Additionally, users can download content for offline viewing.
Premium: Positioned at £10.99 per month, this premium tier showcases content in 4k video quality. It grants users the ability to download content and stream on up to four devices concurrently.
For current subscribers enjoying the features of the premium tier, the introduction of the new options entails an effective monthly price hike of £3.
The decision to launch an ad-supported service echoes a similar maneuver by Netflix, a key competitor in the streaming landscape. Netflix’s proactive approach, which included curbing account sharing, was in response to a plateau in subscriber growth experienced in 2022.
Disney’s strategic focus on its streaming division has yielded promising results, with streaming losses halved to approximately $500 million in the quarter ending July 1st. Core Disney+ subscriptions achieved a 1% growth, totaling 105.7 million subscribers, buoyed by international expansion that offset a slight decline in the US market.
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