A paid tier could help Disney reach its long-term subscriber goal of 230-260 million by 2024.
Disney on Friday said it would debut an ad-supported tier for Disney+ in the U.S. by the end of the year. It plans to reveal the price of the new plan later this year.The ad-supported tier, which will presumably cost much less than Disney+'s current $8 monthly subscription in North America, will help the company accrue more customers who may be looking to save money as the subscription streaming landscape becomes more crowded.
Disney currently has nearly 200 million subscribers globally. A paid tier could also help it reach its long-term subscriber goal of 230 million to 260 million by 2024.The new tier also creates more ad inventory for Disney to sell alongside ads on its linear TV channels. Currently, more than 40% of Disney's video ad inventory comes from streaming across Hulu and ESPN+, a Disney ad executive recentlyIt will also help Disney make more money off of each user than it currently does. The average revenue per paid subscriber of Disney+ is $6.68 in North America, compared to roughly $14 for Netflix.
Several of Disney's rivals have already introduced ad-supported plans, including Peacock, Paramount+, HBO Max and Discovery+.The company plans to expand its ad-supported tier internationally in 2023.
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