Disney Is Exploring a Free Tier for Disney+
"We see it as a way to expand our reach to a customer segment that's that's more price sensitive," CEO Josh D'Amaro says The post Disney Is Exploring a Free Tier for Disney+ appeared first on TheWrap .
Disney is examining the possibility of introducing a free tier for its streaming service, Disney+, according to CEO Josh D’Amaro. During the company’s Q3 earnings call, D’Amaro mentioned that a free tier could assist the streamer in accomplishing multiple objectives. The primary goal, as per D’Amaro, is to broaden the service’s reach to a more cost-conscious customer segment.
This strategy aligns with Disney’s stated priorities for growth. Additionally, a free tier would provide Disney+ with an advantage over other ad-supported video on demand (AVOD) competitors by allowing the company to expand its inventory, which could subsequently accelerate ad revenue growth. Furthermore, D’Amaro highlighted that a free offering could contribute to the growth of Disney+ subscribers.
This concept bears resemblance to the free ad-supported tiers previously offered by Peacock and Hulu. Prior to 2023, Peacock offered a free tier with advertisements alongside its paid options, while Hulu discontinued its free tier in 2016. Apart from Peacock and Hulu, there exist numerous other free ad-supported streaming TV services such as Tubi, Roku TV, and Samsung TV Plus.
Fox is in the process of acquiring Roku, which currently owns Tubi. Although these TV models are entirely funded by advertisements, they function differently compared to streaming services like Disney+. Free tiers typically aim to attract consumers to a new streaming platform. Hence, Peacock maintained its free service for an extended period.
Hulu initially launched as a joint venture between News Corporation and NBCUniversal, designed to tap into the burgeoning streaming market. However, Disney+’s decision to contemplate a free tier is unusual, considering that Disney+ is an established streaming service that accounted for 4.9% of all TV viewership in May. This move suggests that Disney may be contemplating aligning its streaming platform more closely with YouTube and Free Ad-supported Services (FAST), which are currently the only streaming services offering free access.
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