The Walt Disney Company announced two months ago that it would be offering an ad-supported tier. While questions remain about the plan, such as pricing and launch date, we now know that Disney+ is keeping the number of ads to a minimum. Today, The Wall Street Journal reported that Disney+ promises to limit total ad load to an average of four minutes of commercials an hour. Also, preschool programming will not have any commercials whatsoever. Disney confirmed this to TechCrunch and added that the lighter ad load and no commercials for preschool content will be the plan for initial launch.
Disney+ will have fewer ads than its sister service Hulu’s ad-supported tier, which shows ads for nearly twice as much time (approximately 7.4 ads). Peacock service has about five minutes of commercials an hour, and HBO Max doesn’t have more than four minutes of ads an hour. Hulu was once known as the go-to AVOD (advertising video on demand) service; however, ot is now the company with the highest number of ads per hour. Peacock and HBO Max have the lightest commercial loads, according to MediaRadar. Consumers watching traditional TV will usually get 18 and 23 minutes of commercials an hour, per Kantar data.
Rita Ferro, Walt Disney Company’s president of Advertising Sales, said, “We’re never going to collect data on individual kids to target them.” Preschool children who use their own profile to watch the ad-supported Disney+ tier will not see any advertising. Disney+ has content that is considered brand safe, which is very attractive to advertisers.
While we don’t yet know the cost of the ad-supported version of Disney+, we do know that Disney executives indicated during the company’s recent earnings call that there would most likely be a price increase to the ad-free tier, which currently stands at $7.99 a month, once the lower-priced, ad-supported option was made available to viewers.
Since the company will be launching its cheaper ad-supported subscription plan later this year, following Netflix’s rollout of its own ad-supported tier, the two platforms will be compared more than ever before. It will be interesting to see how many ads Netflix chooses to show and which brands will want to appear next to Netflix content, which is less “brand safe.” Netflix disclosed 221.6 million subscribers in its most recent quarterly report, while Disney+ had 137.7 million.
The Wall Street Journal also reported that ad buyers said Disney+ wants to charge advertisers approximately $50 to $60 CPM (cost per thousand). This price range is apparently in line with other major streamers, according to ad buyers. Wall Street Journal wrote that “Disney declined to comment on pricing.” Spending on TV advertising (streaming, national and local TV) in the U.S. is expected to increase 6% to $74.2 billion in 2022, per GroupM estimates.
The report comes as Disney is preparing for its annual upfront event in New York City later this afternoon. According to Ferro, the event will be “unlike anything you’ve ever seen.” This is the company’s opportunity to reveal its advertising strategy for Disney+ as well as new programming coming to Hulu and ESPN+. There will most likely be news on ABC and ESPN at the upfront as well.
Update, 5/17/22, 12:55 p.m. Updated with Disney giving TC additional information.