Disney+ to launch cheaper ad-supported tier later this year

In this photo illustration the Disney + logo seen displayed on a smartphone screen.

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Disney announced on Friday a new ad-supported tier for its Disney + streaming service that will launch in the US later this year.

Disney did not provide a launch date or price for the new tier. The new ad-supported tier will expand internationally in 2023.

The company said in a press release that the new offering would be “a building block” in achieving its goal of reaching 230 million to 260 million Disney + subscribers by 2024.

Adding an advertising-support tier will allow Disney to boost average revenue per user – a metric that currently trails most rivals. Comcast Chief Executive Officer Brian Roberts said last quarter NBCUniversal’s Peacock had ARPU of nearly $ 10 per month per user, driven largely by advertising.The average revenue per user per month for Disney + in the US and Canada was $ 6.68 last quarter.

WarnerMedia’s HBO Max, Paramount Global’s Paramount +, and Discovery’s Discovery + are among streaming services that already offer advertising-supported streaming options.

Hulu, majority owned by Disney, also already offers an ad-supported product for $ 6.99 per month, compared to its ad-free service, priced at $ 12.99 per month. Disney is streamlining backend technology to enable selling advertising on all of its streaming products, according to a person familiar with the matter.

This story is developing. Check back for updates.

Disclosure: Comcast is the owner of CNBC parent company NBCUniversal.

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