Disney+ just got more expensive … unless you want ads

Arts & Entertainment

(CNN) — Disney+ is getting more expensive, unless you want ads.

As of Thursday, Disney’s ad-free tier costs $10.99 per month — an increase of $3. But for those that want to save a few dollars, Disney+ has a new tier with ads that costs $7.99 per month. The introduction of the new tier, called Disney+ Basic, comes about a month after Netflix launched its ad-supported tier for $6.99 per month.

The Disney+ service now has three bundles with its sister platforms — Hulu and ESPN+ — including a new one that combines Hulu’s ad-supported tier and the new Disney+ Basic package for just $9.99 per month. That represents a considerable savings, considering that “Hulu with Ads” alone costs $7.99 per month. Another tier that combines all three services with ads costs $12.99 per month.

Disney first announced that it would be introducing an ad-supported tier in March, saying that it sees it “as a building block” in the company’s goal of reaching 230 million to 260 million long-term subscribers by the 2024 fiscal year. Disney+ has 164.2 million global subscribers as of November.

Despite their popularity, streaming services including Netflix and HBO Max (owned by CNN’s parent company Warner Bros. Discovery), are bleeding money. Media companies are finding new ways to attract subscribers and revenue.

Disney’s streaming business lost $1.5 billion in the quarter, compared to a loss of $630 million in last year’s fourth quarter.

“The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally,” Bob Chapek, Disney’s CEO, said in a letter to investors last month. “We expect our [direct to consumer] operating losses to narrow going forward.”

Chapek added that the streaming unit will still “achieve profitability in fiscal 2024.”

–CNN’s Frank Pallotta contributed to this report.

The-CNN-Wire
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