Disney Plus switched to a paid ad tier because the company needed to grow revenue without raising prices on everyone
Disney Plus launched in 2019 with no ads at all. In December 2022, Disney introduced a new tier called Disney Plus Basic with Ads — a cheaper monthly plan that shows commercials. The ad-free plan still exists but costs more. Disney made this change because streaming services lose money when they have more subscribers than they can afford to serve, and the company needed a way to bring in more revenue without forcing existing customers to pay higher prices.
The shift reflects a broader pattern across the streaming industry. Netflix added ads in late 2022. Amazon Prime Video followed in 2024. These companies discovered that the streaming market had stopped growing as fast as it did in the early years, and they needed new ways to make money from the subscribers they already had.
Key Takeaways
- Disney Plus offers two tiers now: Basic with Ads (cheaper, includes commercials) and Premium (more expensive, no ads).
- The company introduced ads because streaming services spend more money on content and infrastructure than they earn from subscriptions alone.
- Disney owns the content it streams, which is different from Netflix, but the company still found it necessary to add a revenue stream beyond subscription fees.
- The ad tier is optional — you can keep paying for ad-free viewing if you choose, though the price has increased over time.
How streaming services actually lose money
A streaming service pays for content upfront — sometimes hundreds of millions of dollars for a single show or movie — but collects subscription revenue gradually over months or years. If a service has 150 million subscribers paying $11 a month, that sounds like a lot until you realize the company spends $15 billion a year on content alone, plus billions more on servers, bandwidth, customer service, and technology staff.
Disney Plus grew very fast in its first three years. Fast growth looks good to investors, but it also means the company was spending money faster than it was collecting it. By 2022, Disney's streaming division was losing billions of dollars per year across all its services (Disney Plus, Hulu, and ESPN Plus combined). The company needed to either raise prices, cut spending on shows, or find a new source of money. Adding ads was the third option.
Why Disney chose ads instead of just raising prices
Raising prices on everyone would have caused some subscribers to cancel. Market research suggested that offering a cheaper ad-supported option would keep price-sensitive customers while letting the company charge more for ad-free viewing. People who could afford it would pay extra to avoid ads; people on a tighter budget could stay subscribed at a lower price.
This strategy also lets Disney collect money from advertisers. A company like Coca-Cola or Toyota pays Disney to show its ads to millions of viewers. That money goes directly to Disney's revenue, separate from subscription fees. For Disney, this means the same content generates income from two sources: subscribers and advertisers.
What changed about the ad-free tier
When Disney Plus launched, the only plan cost $7.99 per month with no ads. In December 2022, Disney introduced the Basic with Ads tier at $7.99 per month (the same price as the original plan), but moved the ad-free plan to a new tier called Premium at $10.99 per month. In October 2024, Disney raised the Premium price to $13.99 per month.
This means if you had the original ad-free plan, your price went up over time. Disney grandfathered in some long-term subscribers at the old price for a period, but eventually everyone moved to the new pricing structure. The company framed this as offering a cheaper option (the ad tier), but the effect was that the ad-free experience became more expensive.
How many ads you actually see
Disney Plus Basic with Ads shows roughly 4 to 5 minutes of commercials per hour of content. That is less than traditional cable television (which shows 8 to 10 minutes per hour) but more than some competitors. The ads are unskippable, and you cannot fast-forward through them.
The ads are also targeted based on information Disney collects about you — your age, location, viewing history, and other data. This targeting makes the ads more valuable to advertisers, which means Disney can charge them more money, which means the company makes more revenue per subscriber on the ad tier.
Whether other streaming services will follow the same path
Netflix, Amazon Prime Video, and other services have already introduced ad tiers. HBO Max (now called Max) offers both ad-supported and ad-free plans. The pattern is clear: streaming services that were once ad-free are now adding ads as a way to increase revenue.
This does not mean all streaming services will eventually become ad-heavy like cable television. The ad-free tier still exists on every service that offers ads, and some people will always pay to avoid commercials. But the days of unlimited ad-free streaming at a low price appear to be over. The industry has settled on a model where you can choose between paying more for no ads or paying less and watching commercials.
What this means for your Disney Plus experience
If you currently have Disney Plus Premium (ad-free), your experience has not changed — you still see no ads. Your price may have gone up, but the service itself works the same way.
If you switch to or start with Basic with Ads, you will see commercials at the beginning, middle, and end of shows and movies. Some features also work differently on the ad tier: you cannot read content to watch offline, and the video quality maxes out at 1080p instead of 4K. The ad-free Premium tier includes offline downloads and 4K streaming.
You can switch between tiers at any time through your account settings. If you find the ads annoying, you can upgrade to Premium. If you want to save money, you can downgrade to Basic with Ads.
Frequently Asked Questions
Can I still watch Disney Plus without ads?
Yes. The Premium tier costs $13.99 per month and includes no ads. You can also read content to watch offline and stream in 4K. The ad-free option still exists; it just costs more than it did when Disney Plus first launched.
How much does the ad-supported tier cost?
Disney Plus Basic with Ads costs $7.99 per month. This is the same price the original ad-free plan cost when the service launched, but now it includes commercials. The ad-free Premium tier is $13.99 per month.
Do I have to watch the ads all the way through?
Yes. Ads on Disney Plus Basic with Ads are unskippable. You cannot fast-forward or skip ahead. You will see roughly 4 to 5 minutes of commercials per hour of content.
Will Disney Plus ever go back to being ad-free?
Unlikely. The company introduced ads because it needed more revenue, and that need has not gone away. The ad-free tier still exists as a paid option, but the company is unlikely to remove ads from the cheaper tier or return to an all-free model.
What if I do not want to pay for Disney Plus anymore?
You can cancel your subscription at any time through your account settings. There is no contract or cancellation fee. If you want to watch Disney content later, you can resubscribe whenever you choose.