×
Back to IndieWire

Here’s the Strange Story Behind Disney Announcing the Cheaper, Ad-Supported Disney+

How to expedite growth? Slash prices and assemble all the superheroes.

Disney+ Upfront

Rita Ferro presents the 2019-2020 TV lineups for ABC/Disney.

Courtesy of Pawel Kaminski/Walt Disney Television

How do you do, fellow kids! Now Disney+ not only has your programming, it’ll soon have your price point.

At 11 a.m. ET March 1, Disney+ surprised fans by bringing over all six Marvel series originally produced for Netflix — gratuitous violence, curse words and all — with a new TV-MA setting in the typically family-friendly streaming service’s parental controls. Exactly 60 hours later, Disney+ revealed that a brand new (and cheaper) ad-supported version — aka AVOD — will roll out in the U.S. later this year, with international territories to follow in 2023. (Exact price point and launch timing TBD.)

As more services clutter the space and fight for your entertainment budget, a multitiered approach to streaming makes sense. Cord-cutters can still avoid commercials, and the folks who don’t mind a McDonald’s ad every now and again can afford one more Big Mac per month while still gobbling down the same premium programming.

Lowering the barrier to entry for cost-conscious consumers will help The Walt Disney Company achieve its lofty, long-term target of 230-to-260 million Disney+ subscribers by 2024, a figure reiterated in its March 4 AVOD announcement. According to an SEC filing, Disney+ had nearly 130 million global subscribers at the end of 2021. How to expedite the growth? Slash prices and assemble all the superheroes.

Disney+ is a little late to the AVOD party; Peacock, Paramount+, Hulu (which is majority-owned by Disney), and HBO Max already have ad-supported options in addition to commercial-free memberships. But here’s what makes this announcement odd: The day before, Disney Media and Entertainment Distribution’s advertising president Rita Ferro made a major presentation in New York. The topic: innovations in cross-platform measurement. Her audience: media-buying clients — the same people who might be keen to buy Disney+ air time.

Ferro’s opening remarks, according to a script obtained by IndieWire, went like this: “Hi everybody! I’m thrilled to be back to kick off our second annual technology and data showcase. I couldn’t be prouder of the work we’ve accomplished with many of you over the past year. As we look ahead, today is NOT about unveiling some grand new strategy, a pivot, or adding more complexity into our industry. No.”

Cut to this morning, when Ferro unveiled a… grand new strategy.

“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,” Ferro said in Friday’s press release. “Disney+ with advertising will offer marketers the most premium environment in streaming with our most beloved brands, Disney, Pixar, Star Wars, Marvel and National Geographic. I can’t wait to share more with advertisers at the Upfront.”

The Disney-ABC upfront, an annual presentation of new programming to potential advertisers, will be an in-person event May 17 at Pier 36 in New York City.

Why was Friday’s AVOD news not a major part of Thursday’s measurement presentation? “Disney’s Tech & Data Showcase spotlight our advancements and introduce new updates around our technology, data, and measurement investments that brands can activate against today. Future opportunities around today’s announcement will be shared at the Upfront,” a Disney-ABC spokesperson told IndieWire.

OK, but surely Ferro told her commercial-buying friends about the pending announcement post-presentation, at the cocktail party held beneath the suspended 21,000-pound foam-and-fiberglass blue whale in New York City’s American Museum of Natural History?

That didn’t happen, the spokesperson told us: “Journalists, partners, clients, and vendors all found out once the press release went live.”

The important thing that we all know today — and did not know on Monday — is that with the Marvel show migration and its lower-priced ad-supported option, Disney+ has a clear plan to suck up millions of new customers like krill.

“Expanding access to Disney+ to a broader audience at a lower price point is a win for everyone – consumers, advertisers, and our storytellers,” Kareem Daniel, the chairman of DMED, said Friday. “More consumers will be able to access our amazing content. Advertisers will be able to reach a wider audience, and our storytellers will be able to share their incredible work with more fans and families.”

Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.

This Article is related to: Television and tagged ,


Get The Latest IndieWire Alerts And Newsletters Delivered Directly To Your Inbox