Disney Expects Most Disney+ Subscribers Will Take Its Cheaper Ad-Based Plan

variety.com:

Todd Spangler NY Digital EditorDisney is anticipating that over the long term, the majority of Disney+ customers will pick the lower-cost, ad-supported plan, which is set to launch later this year.“Based on our Hulu experience, we actually have more AVOD [ad-supported video-on-demand] than SVOD [subscription VOD] subscribers,” Disney CFO Christine McCarthy said, speaking Wednesday at the 9th Annual MoffettNathanson Media and Communications Summit. “We expect about the same percentage for both Disney+ and Hulu, just based on the experience curve we’ve witnessed.”A few years ago, Hulu revealed that 70% of its viewers were on ad-supported plans with the remainder on the pricier ad-free version.Since announcing plans to roll out Disney+ with ads in March, the company has mostly been mum on details about Disney+ with ads, saying only that it will be less expensive than the ad-free version (currently $7.99/month in the U.S.) and will debut first in the U.S.

in late 2022. Variety reported this week that the ad-supported version of Disney+ will not accept alcohol or political advertising at launch, nor will it run ads from rival streamers or entertainment studios.At the MoffettNathanson conference, Rita Ferro, president of Disney Advertising Sales, said that out of the gate, the Disney+ ad-supported tier will have an average of four minutes per hour — a lighter load than Hulu.

Partly that’s because 65% of viewing on Disney+ is movies, which has fewer ad breaks than series, she said.The Disney+ ad-supported service will start with 15- and 30-second spots, but will expand to a “full suite of ad products” over time, Ferro said.