Disney+ streaming service to offer low-cost version with ads

Disney plans to release details about price and timing at a later date. PHOTO: AFP

LOS ANGELES (BLOOMBERG) - Walt Disney, looking to accelerate growth of its flagship streaming service, will offer a lower-priced version of Disney+ with advertising later this year.

The new service will begin in the United States in late 2022 and expand internationally next year, Disney said in a statement on Friday (March 4).

The company plans to release details about price and timing at a later date.

The move follows other media companies offering various plan options for their online video services.

Comcast's Peacock and AT&T's HBO Max both come with ad-supported and ad-free versions. Disney's own Hulu streaming service has turned commercials into a US$1 billion (S$1.36 billion) revenue stream.

The one exception now among the large streaming companies is Netflix, which offers three pricing tiers but none that include advertising.

"Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone - consumers, advertisers and our storytellers," said Mr Kareem Daniel, chairman of Disney Media and Entertainment Distribution, in the statement.

Disney+, which features classic animated films as well as original series such as the Star Wars spinoff The Mandalorian (2019 to present), launched in 2019 for US$7 a month.

After a price increase last year, it now costs about US$8 a month or US$80 a year.

The company also offers a bundle that includes ESPN+ and the ad-supported version of Hulu for about US$14 a month.

The company reported 129.8 million Disney+ subscribers in the fiscal first quarter.

Disney chief executive officer Bob Chapek has set an ambitious goal of at least 230 million subscribers worldwide by 2024.

Disney said on Friday that the ad-supported version of Disney+ is seen "as a building block" for that target.

Join ST's Telegram channel and get the latest breaking news delivered to you.