Disney Plus is getting a cheaper tier with ads — what you need to know

Announced in an email to the press sent moments ago, Disney Plus will have a lower-priced ad-supported price option later this year that sits below its current $7.99 per month price. The plan will debut in the U.S. and "expand internationally" in 2023.

News about an ad-supported Disney Plus tier leaked to The Information yesterday. The company believes this is necessary to achieving its subscriber goals, as the press release announcing the upcoming plan states "The ad-supported offering is viewed as a building block in the Company’s path to achieving its long-term target of 230-260 million Disney+ subscribers by FY24."

This addition helps Disney Plus fit into most of the rest of the streaming market. Many competitors, including Hulu, HBO Max, Paramount Plus and Peacock, all have ad-supported tiers available at lower prices. The new price option, and the date for its availability, will be "announced at a later date" according to the release.

Disney Plus' already low price helps it hold a slot on our best streaming services list. This lower price may help Disney Plus retain subscribers such as my colleague who wants to cancel Disney Plus.

Unsurprisingly, advertisers have been keen on showing commercials to the Disney Plus audience. Rita Ferry, President, Advertising, Disney Media and Entertainment Distribution is quoted as saying "Since its launch, advertisers have been clamoring for the opportunity to be part of Disney+ and not just because there’s a growing demand for more streaming inventory."

This news comes in the middle of a very busy month for the house of the mouse. Disney Plus is finally getting the Netflix Marvel shows and getting better parental controls in the U.S.. All of the above combined to make Disney Plus a more complete streaming service, giving audiences more choice about how much money they want to spend on Disney Plus.

The Walt Disney Company is no stranger to serving ads in streaming, as the company owns a majority stake in Hulu. 

Ad-supported streaming service pricing

It's hard to guess how much the ad-supported Disney Plus will cost, since ad-supported tiers typically cost $5 to $6 less than the ad-free tiers. If Disney Plus held at $7.99, that would lower the price to around $2 to $3 per month, which would be shocking.

A $4.99 per month price, the same as Apple TV Plus, would make sense.

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