Survey: Netflix, Disney+ Ad-Supported Tiers Not Likely to Drive New Subscribers
“We’ll be right back after this word from our sponsors” is a phrase many streaming customers thought they would be leaving behind when they signed up for a service like Netflix or Disney+. But after announcements that both companies will be launching ad-supported tiers in the coming months — Disney+ in December, Netflix in early 2023 — customers should be prepared for messages like that if they opt to sign up for those tiers.
According to research done by Kagan's Consumer Insights, however, those customers will likely not be new customers to Netflix and Disney+. Instead, they will most likely be existing subscribers who choose to switch from their current, ad-free plans.
One point of data that suggests new subscribers will not be flocking to Netflix and Disney+ upon the release of their ad-supported tiers: most people who subscribe to an ad-supported tier of another streaming service already use Netflix and Disney+.
That means that there is simply not a terribly large pool of new subscribers waiting in the wings for Disney+ and Netflix to pull from. Disney already has 221 million global subscribers across its three streaming services, while Netflix boasts 220 million on its lone streamer. Given the saturation of the streaming market and those already high subscription rates, an influx of customers that have never subscribed to those services before is unlikely according to Kagan’s study.
Additionally, customers who use ad-supported subscription tiers are highly likely to select ad-supported tiers for other streaming services. Kagan’s research points to a relatively low ad load as compared to linear TV as the primary reason that customers did not mind ads.
Interestingly, income was not the primary factor in many customers’ choice of ad-free or ad-supported tiers. In fact, Paramount+ has more subscribers making less than $50,000/year in its ad-free tier as opposed to its cheaper ad-supported tier. The most expensive two-tiered subscription service, HBO Max, has almost as many high-income ad-free users as lower-income ad-free users.
The data comes amidst what some would consider a Golden Age of Ad-Supported Streaming, and the analysis of what that means for the industry’s future has not exactly been consistent, with different researchers forecasting different results.
For instance, 56% of respondents to a recent survey said that they would rather pay less for their streaming services and put up with a few ads.
That number could suggest that Disney+ and Netflix might be in line for a bigger jump in new subscribers than Kagan’s numbers indicate. The average U.S. customer subscribes to five streaming services, and the proliferation of ad-supported tiers will make it easier to justify budgeting for a new one with the money saved on not using ad-free versions of other streamers.
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages.
Disney+ has two plans – one with ads and one without ads. Disney+ Basic with Ads costs $7.99 / month. If you don’t want ads, you can choose Disney+ Premium with No Ads which costs $10.99 / month.
The Premium plan also offers an annual option for $109.99 / year ($9.17/mo.).
If you want all of Disney streaming services, they have two options for The Disney Bundle. The Disney Bundle Basic includes Disney+, Hulu, and ESPN+ (with Ads) for $7.99 / month. The Disney Bundle Premium (without Ads) for $19.99 / month.
The app supports unlimited downloads (on their Premium Plans), four simultaneous streamers, up to 7 profiles, 4K streaming, and includes hundreds of avatars.
The service includes 25+ new original series, 10+ original movies, 7,500 past episodes, 100 recent movies, and 400 library titles including the entire Disney Vault. You can stream original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”
You can see the full list of available Disney, Disney Channel, Star Wars, Pixar, Marvel, Nat Geo shows and movies, or all available Disney+ content by checking out our Disney+ Streaming Movie List.Sign Up
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.
Netflix offers four plans — on 1 device in SD with their “Basic with Ads” ($6.99) plan, on 1 device in SD with their “Basic” ($9.99) plan, on 2 devices in HD with their “Standard” ($15.49) plan, and 4 devices in up to 4K on their “Premium” ($19.99) plan.
Netflix spends more money on content than any other streaming service meaning that you get more value for the monthly fee.