The Major Reason an Ad-Supported Tier Makes More Sense for Disney Than for Netflix
Walt Disney (NYSE: DIS) and Netflix (NASDAQ: NFLX) rank as arguably the top two U.S.-based streaming companies. Both have rolled out ad-supported tiers. The Netflix version costs $6.99 per month while Disney+ costs $7.99. Disney+ and Hulu with ads cost $9.99 per month and Disney+, Hulu, and ESPN+ (all with ads) clock in at $14.99.
Both media companies hope that an ad-supported tier will help grow subscribers and provide a lower-cost option that prevents customers from unsubscribing altogether during price hikes.
While Netflix deserves a lot of credit for pioneering the streaming model, Disney has a much deeper history with content creation and with advertising across its media outlets. Here's why an ad-supported tier is particularly important for Disney, and why it could be the catalyst that drives Disney+ toward becoming the profitable growth engine the company always hoped it could be.
Source Fool.com
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