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Disney Plus has no plans for a lower cost ad-supported option for now, CEO says

Disney Plus has no plans for a lower cost ad-supported option for now, CEO says


The platform will remain ad-free — for now, at least

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Image: Disney

Many major streamers support advertising in some form or another — think Hulu, HBO Max, or Sling TV as just a few examples — but Disney’s chief says the company’s marquee service won’t be adding ads to its service anytime soon.

Speaking at the Credit Suisse 23rd Annual Communications Conference on Tuesday, Disney head Bob Chapek was asked by moderator and Credit Suisse managing director Doug Mitchelson whether the service planned to introduce an ad-supported entry tier at some point down the line. While he didn’t entirely dismiss the concept of a cheaper ad-supported tier on Disney Plus, Chapek said it wasn’t something the company was currently planning for.

“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,” Chapek said. “We won’t limit ourselves and say no to anything. But right now, we have no such plans for that.”

Mitchelson raised an interesting point: Many Disney consumers are already familiar with an ad experience through the Disney Channel — it’s offered through cable, after all — and ad-supported streaming offered at a discount is popular among many major services. But as for its current pricing and that recent price hike? Chapek said that the leap from $7 per month to $8 did little to affect the company’s subscription numbers.

“Right now, we have no such plans for that.”

“We did launch at a very attractive price-value opening point,” Chapek said. “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.”

Disney Plus will certainly see subscription increases over time. Most major services jack up their prices regularly, with many arguing that the value they provide justifies the ever-climbing monthly subscription fees. How quickly we’ll see Disney crank pricing up to Netflix- and HBO Max-subscription levels, however, is unclear. Based on streaming trends for virtually every major streaming service over the last several years, we’re very likely to see Disney’s cost continue to go up as well as the app expands its library.

When the cost of the service does eventually climb to more closely mirror the value of the service, Disney would be wise to introduce either an a la carte tier to its service or add some kind of ad-supported plan. For now, at least, we’re spared.