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Wednesday, Feb 8, 2023

An Ad-Supported Disney+ Premieres

The Walt Disney Co. unveiled an ad-supported Disney+ plan in a move that most agree is meant to bring profitability to the streaming business.

The Burbank entertainment and media giant is offering Disney+ Basic at $7.99 a month.
Michael Paull, president of the direct to consumer at the company, said that the launch on Dec. 8 marked a milestone for Disney+ and puts consumer choice at the forefront.

The streaming service has more than 100 companies and brands advertising on Disney+, including Mattel Inc., in El Segundo, Chipotle Mexican Grill, Inc., in Newport Beach, Taco Bell, in Irvine, as well as national brands like Walmart Inc., L.L Bean, and Adidas AG.

The advertising will be conservative at first, with roughly four minutes of ads in 15- and 30-second spots, per hour or less, according to the company. The company’s other streaming services, Hulu and ESPN+, already have ads.

Rita Ferro, president of Disney advertising, said that the company welcomed Disney+ with ads to the largest, most diverse portfolio in the industry.
“We are committed to connecting our clients to the best storytelling in the world while delivering innovation and viewer-first experiences in streaming now and in the future,” Ferro said in a statement.

Disney+ Basic subscribers currently have the same features as those on the ad-free Disney+ Premium service.

This includes a growing collection of thousands of titles across films, documentaries, series, and shorts, plus access to Disney’s long history of film and television series; and the ability to create up to seven profiles per account and stream on four devices simultaneously.
On the same day as the ad-supported tier launch, Disney raised the price of its ad-free tier to $10.99 a month.

The company is under pressure to turn a profit on its streaming business, which posted a $1.5 billon loss in the most recent quarter.

Investor unhappiness about deepening losses hammered the company’s stock and helped set the stage for the ouster last month of Chief Executive Bob Chapek and the return of longtime Disney leader Bob Iger.

In an interview with Yahoo Finance Live, Geetha Rangathan, an analyst with Bloomberg Intelligence, the research division of Bloomberg, said that she expects Disney to generate between $500 million to $1 billion in ad-supported revenue on the Disney+ Basic product in its first year of operation, according to a story from Yahoo Finance.

Paola Mendez
Paola Mendez
Paola Mendez graduated from Los Angeles Valley College, then transferred to University of California, and now serves as a Receptionist and Office Assistant to the Los Angeles Business Journal. Paola wears many hats in different departments and is trilingual in English, Spanish and French.

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