A cheaper version of the Walt Disney Company’s flagship streaming service Disney Plus launched on Thursday, but users of Roku streaming devices and smart TV sets will not be able to access it for some time.
The ad-supported tier of service launched Thursday morning at a price point of $8 a month, while the commercial-free version of Disney Plus increased to $11 a month, prompting some customers to switch tiers in order to save money.
Roku users who did so eventually learned that they weren’t able to access Disney Plus at all from their streaming devices and Roku-powered TV sets. The situation was confirmed on a help page published by Disney, which said the ad-supported tier isn’t currently available to Roku users.
The company has not disclosed the reason why Roku users are being left out of the ad-supported tier, but a person familiar with the matter told The Desk that the issue stems from Roku’s insistence that ad-supported streaming applications allow Roku to set aside a certain amount of advertisement inventory for itself.
That same policy kept Comcast’s Peacock and Warner Bros Discovery’s HBO Max from landing on the service several months after they launched. Like Disney Plus, Peacock and HBO Max offer cheaper, ad-supported subscription plans in which commercials help offset the expense of providing content to users.
Roku users had to wait several months for Comcast and WBD to reach an agreement with the platform before Peacock and HBO Max were made available. Terms of the deal between Roku and the media companies weren’t revealed.
Roku feels it has a lot of leverage to negotiate favorable terms from ad-supported streaming services: The company is tied with Amazon’s Fire TV platform for market dominance in the United States. Collectively, Roku and Amazon Fire TV command 80 percent of the streaming TV market in the United States, according to data released by Parks Associates in October. Each company has an equal 40 percent share of the space, Parks Associates data revealed.
Like other media companies, executives at Disney have been pressured by investors to end its practice of losing money on content production and marketing for its direct-to-consumer streaming services. Historically, investors have been willing to wait as companies like Disney offered their streaming services at a low price point in order to attract the masses.
Disney and others have sought to address these concerns by offering cheaper, ad-supported plans of service that are intended to help reduce churn, lower the price point and open up additional streams of revenue to offset costs. Comcast, Warner Bros Discovery and Paramount Global have offered cheaper, ad-supported tiers for a while now; Netflix introduced an ad-supported plan for its streaming service last month.
On Thursday, Disney executives affirmed it had more than 100 advertisers from various business sectors signed on for Disney Plus. The ad-supported plan won’t run commercials against content made for kids, Disney says; instead, commercials will play when users are watching family-oriented movies and TV shows like “Dancing with the Stars” and National Geographic documentaries.
Disney says it will serve up about four minutes of commercials per hour — far fewer than its general entertainment service Hulu, which was recently found to have the most-annoying ads, according to a consumer survey — but won’t run the full four minutes of ads at first.
“We will launch with one brand per hour, twice per day, 12 times per week,” Rita Ferro, Disney’s president of advertising sales, told the industry publication AdAge this week. “And that is half of what we do today on Hulu in terms of frequency capping to ensure that user experience is obviously front and center to everything we’re doing for Disney Plus.”