Disney reveals how ads are likely to run on Disney+

In an upfront presentation to advertisers and investors, the Walt Disney Company provided more details about the recently announced ad-supported tier for its flagship digital streaming service, Disney+. While Disney did not provide details about pricing or when the new tier would be available to consumers, it gave the most information to date about the streaming platform’s advertising strategy.

Disney+ expects to have less advertising than Hulu’s ad supported tier – an average of about 4 minutes per hour– citing the content differences between the two platforms. Movies are a major attraction for subscribers to Disney+, while Hulu focuses on series, providing next-day streaming for network shows as well as Hulu Originals such as Dopesick and The Handmaid’s Tale. Series more easily lend themselves to including ads than movies, which viewers typically prefer to watch uninterrupted by commercials.

“Movies are the reason people come to the platform [Disney+], and movies have a different ad load,” Rita Ferro, president of ad sales for Disney, said at the MoffettNathanson Annual Media & Communications Summit.

Disney+ plans to start with shorter 15- and 30-second spots before releasing the full portfolio of advertising options. The company claims that it has seen high demand for advertising with the digital streamer, which features content from such tentpoles as Marvel, Star Wars, and Pixar. The family-friendly nature of Disney+ also means some product categories, such as alcoholic beverages and political commercials, will not be allowed on the platform. Additionally, Disney has reassured parents that there will be no ads in content aimed at preschoolers.

Disney projects that eventually the percent of Disney+ subscribers who choose the cheaper ad tier will be about the same as the split they see for Hulu. Generally, streaming services that offer both ad-supported and ad-free options see a greater number of subscribers to the lower priced level with ads.

Focusing on shorter ads is probably a good decision. According to Interpret’s VideoWatch, Disney+ subscribers in the US are slightly more tolerant of short ads than the typical digital streamer, while half of Disney+ subscribers can’t stand long ads.

From a global perspective, Disney intends to expand Disney+ to about 150 markets by the end of this year. The company explained that ad inventory for Disney+ will be sold at a premium, which should increase the average revenue per subscriber. Disney+ has over 137 million paying subscribers (as of April), up 33% year-over-year. With new markets and a new ad tier to entice consumers, the platform is poised to gain even more momentum.

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