What the New Disney+ Ad Tier Means for Disney, Advertisers, and Viewers

5 Min Read

Since its launch, Disney+ has quickly made a name for itself in a crowded streaming market thanks to premium content, a massive library of movies and shows, and a wallet-friendly cost of entry ($7.99 a month). Now, the giant has announced that they’re following in the footsteps of HBO Max, Peacock, Paramount+, Hulu, and countless others – Disney+ will roll out an ad-supported subscription tier, a first for the direct-to-consumer service. With 196.4 million U.S. subscribers, Disney+ is the second biggest streaming platform behind Netflix—and this announcement is sending shockwaves. The good news? Viewers and brands want this. Disney is cultivating a scalable and accessible self-serve advertising platform that aims to expand CTV usage into a larger, more diverse group of advertisers. 

The better news? That technology already exists—and you could have access now.

Why Disney is Embracing Ads

Disney is no stranger to AVOD services—they also own ESPN+ and Hulu, both of which feature an ad-supported tier. In fact, Hulu’s ad offering is so popular that 60% of all subscribers opt for the cheaper AVOD offering over the premium ad-free version. And it’s not a fluke with Hulu—when HBO Max introduced its ad-supported offering last year, a Hub Entertainment poll found that 39% of existing subscribers were interested in switching from the ad-free option, and 27% who weren’t subscribers said they would likely sign up for the ad-supported version.

This move benefits Disney+ by not just generating advertising revenue, but by giving their service a massive shot in the arm. The company called the ad-supported offering a “building block” for their goal of reaching 230-260 million global subscribers by the end of the 2024 fiscal year. Currently, there are 129.8 million subscribers worldwide, with the service grabbing 11.8 million in Q4 of 2021. And as the streaming wars continue to heat up, this subscription boom will help to offset the rising cost of its multi-million-dollar original programming.

CTV Gets its Fairytale Ending

If there are any advertisers still undecided on the future of CTV platforms, Disney’s announcement should squash it. Once launched, the AVOD Disney+ model will leave only two major players in the space without ad offerings (for now)—Netflix and Amazon Prime, the latter of which has expenses financed through an annual Prime subscription anyway.

The new Disney+ tier is bound to be rocket fuel for an advertising channel that is already sky-high—and surpassing timelines for even the most ambitious predictions:

• More people are streaming TV than ever—213.7 million a month—and watching an average of 80 minutes a day
• It was previously expected that US CTV ad spend would hit $11.36 billion in 2021 and grow to $18.29 billion by 2024
• 2022 CTV ad spend is now projected to hit $19.1 billion in 2022 and reach $30 billion by 2025—hitting sales milestones much earlier than anticipated

Disney’s Magic—Data

Thanks to its large amount of data across entertainment, cruises, theme parks, merchandise, and streaming services like Hulu—the largest AVOD CTV app—Disney has access to a lot of data. That data makes the company one of the only media companies that can directly compete for advertiser dollars from Meta and Google. To make use of that data and prepare for their AVOD offering, Disney made a few key moves:

• They combined its back-end tech to facilitate ad buys across linear, streaming, and digital platforms
• They extended Hulu’s self-serve ad-buying tools and attribution tools to Disney+
• They opened up a data clean room for advertisers to match customer data with Disney’s audience data

These moves are welcome news for brands. Surely designed to bring in as many advertisers as possible, the developments echo the self-serve models of paid search and social advertising – two platforms that are both the biggest and most accessible ad channels today. 

Performance TV: CTV Tech of Tomorrow, Today

Premium Connected TV platforms like MNTN Performance TV offer solutions for advertisers to use a wealth of data and comprehensive targeting solutions to get their right ad to the right audience – while they watch their favorite shows.

By already providing a powerful self-serve CTV platform, Performance TV delivers the accessibility and scalability that Disney is building for tomorrow—but available today. These ahead-of-the-curve capabilities make TV advertising possible for brands of all sizes and industries, and give advertisers the power to control of their own camapigns. Other industry-leading features of Performance TV include:

• Get the red-carpet treatment: Get seen on the largest screen in the house—the television – and alongside premium networks like ABC, Bravo, ESPN, and more.
• Use the power of data: Run prospecting and retargeting campaigns that target your ideal customer using first- and third-party data, CRM audience targeting, and LiveRamp integration.
• Have full advertiser control: Launch performance-driven campaigns in minutes, target your ideal audience, and unlock direct-response performance-based strategies.
• Get real-time reporting: Break performance down into the KPIs and metrics that matter most – all with a fully customizable dashboard that lets you display your results any way you want.
• Get proof the ad works: MNTN’s proprietary Cross-Device Verified Visits tells you when a customer engages with your website or converts after seeing your ad—regardless of what device they use in their household