Later this year, Disney Plus will introduce a lower-cost ad-supported subscription tier

Disney Plus will introduce a lower-cost, ad-supported subscription option in “late 2022,” according to the company. The tier will launch in the United States first, before spreading globally in 2023.

Importantly, Disney hasn’t specified how much cheaper the ad-supported version of Disney Plus will be compared to the basic, ad-free plan (which costs $7.99 per month or $79.99 per year) or when the new tier of service will be available.

Subscription services are increasingly combining cheaper options with advertisements. Last year, HBO Max announced a $10 per month option that slashed $5 off the ad-free pricing, however the cheaper plan also includes ads and is limited to HD material (and not 4K). Peacock takes a more varied approach: a smaller selection of content with ads is available for free, with a $4.99 per month tier that includes the entire library with ads, and a $9.99 per month tier that includes the ability to download titles to watch offline and removes (most, but not all) commercials.

Even Hulu, which Disney now owns and manages, has ad-free and ad-supported versions: Hulu with ads costs $6.99 per month (or $69.99 per year), whereas Hulu without commercials costs nearly twice as much at $12.99 per month.

Adding a lower, ad-supported option to Disney Plus might help the firm grow its subscriber base, which is becoming increasingly important for Disney’s media empire’s future. Given that subscriber growth has slowed in recent months, as well as Disney’s ambitious goals of reaching 230 to 260 million Disney Plus subscribers by 2024 (the service currently has 129.8 million subscribers, according to Disney’s Q1 2022 earnings), an ad-supported price tier could help attract another large wave of new customers in the coming months.

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