17 MAY 2022

Upfronts 2022: Disney+ defines a new advertising strategy

Disney+ is about to unveil a new ad-supported tier, although it is being very careful when selecting what type of ads to show in order to keep the service family-friendly.

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After Netflix confirmed its intentions to launch a lower-priced streaming option that includes commercials, a business model it had refused since its founding, Disney’s plan to also add an advertising-supported version of Disney+ has been a hot topic this week as the TV industry gathers in New York City for the annual upfront programming presentations.

As confirmed by Bob Chapek, CEO of Disney, speaking to investors last Wednesday, Disney+ is about to unveil a new ad-supported tier. “The Disney+ ad tier is going to give us the ability to reach an even more broad audience as we expand Disney+ across multiple price points. Using some of our other services, we can see the additive nature of an ad-driven service that enables us to keep the price lower. Of course, that's made up for by the additional revenue that we would get per user on the advertising spending,”   Chapek said.

However, according to two media buyers with knowledge of recent discussions between the company and advertising agencies, cited in Variety, Disney+ is being very careful when selecting what type of ads to show in order to keep the service family-friendly. Apparently, Disney has already signaled to agencies that the new version of Disney+ will not accept alcohol or political advertising at its launch. What is more, it will also not take ads from rival outlets or entertainment studios.

Moreover, according to the two media buyers, the company will also be cautious about running commercials alongside shows aimed at pre-school audiences, and will not run ads at all when an individual user profile in control of the viewing experience indicates a young child is watching.

Disney is being competitive in other ways as well. Ads on Disney+ will run an average of four minutes per hour or less, according to another person familiar with the matter. Therefore, the Disney+ ad load will be significantly lighter than that of its sister streaming outlet Hulu, which has been clocked in recent years running as many as 9 to 12 ads per hour, according to a report from MediaRadar.