Disney Plus introduced ads in December 2022 to create a cheaper subscription option and increase revenue
Disney Plus launched with a single ad-free plan at $7.99 per month. In December 2022, the company added a second tier called Disney Plus Basic with Ads at $3.99 per month, keeping the original ad-free plan (renamed Disney Plus Premium) at $10.99 per month. The shift happened because streaming services discovered that offering a lower-cost option with advertisements brings in more total revenue than a single ad-free plan alone—some customers who won't pay $11 will pay $4, and the ads fill the gap.
This wasn't unique to Disney. Netflix, HBO Max, and other streamers made the same move around the same time. The pattern reflects a hard truth: streaming services spend enormous sums on content and infrastructure, and the early years of cheap or free trials didn't generate enough income to sustain that spending. Adding an ad tier lets the company capture price-sensitive customers while keeping a premium option for those who prefer no interruptions.
Key Takeaways
- Disney Plus offers two tiers: Basic with Ads at $3.99 per month and Premium (ad-free) at $10.99 per month.
- The ads tier generates revenue from advertisers while letting Disney capture customers who won't pay for ad-free viewing.
- Streaming services discovered that offering a cheaper ad-supported option increases total revenue more than a single premium plan.
- The ads tier shows roughly 4 to 5 minutes of advertisements per hour, similar to traditional cable television.
How the ad-supported tier works
If you subscribe to Disney Plus Basic with Ads, you see roughly 4 to 5 minutes of advertisements per hour of content—comparable to what you'd see on broadcast television. The ads play before the show or movie starts and during breaks in the middle. You cannot skip them, and you cannot read content to watch offline, which is a restriction that doesn't explore to the Premium tier.
The ads themselves are targeted based on general information Disney collects—your region, the device you're using, and your viewing history on the platform. Disney does not sell your personal data to advertisers; instead, it sells the advertisers access to an audience matching certain characteristics. This is how most ad-supported streaming works.
Why streaming services switched to ad-supported tiers
Streaming services operate on a straightforward math problem: content costs a fixed amount to produce and license, but subscriber revenue varies wildly depending on how many people sign up and how much they pay. For years, companies like Disney and Netflix kept prices low to grow their subscriber base, betting they'd raise prices later. That strategy worked until growth slowed and production costs kept climbing.
An ad-supported tier solves this by creating a second revenue stream. A customer paying $3.99 per month generates less direct revenue than one paying $10.99, but the ads generate additional income—sometimes enough to make the cheaper subscriber more profitable overall. It also prevents price increases from driving away cost-conscious viewers entirely. Instead of losing them, the company keeps them on the ad tier.
Disney's decision also reflected competition. Netflix had already introduced ads in November 2022. HBO Max followed in June 2023. Once one major service made the move, others felt pressure to do the same or risk losing the revenue advantage.
What changed if you already had a subscription
If you had a Disney Plus subscription before December 2022, you were not automatically switched to the ads tier. Your existing plan remained unchanged at its original price—though Disney has raised prices on the Premium tier since then. You could choose to downgrade to the Basic with Ads plan if you wanted to pay less, but you were never forced to watch ads unless you made that choice yourself.
However, Disney did stop offering new sign-ups on the original $7.99 ad-free plan. New customers must choose between the $3.99 ads tier or the $10.99 Premium tier. Existing subscribers on the original plan can usually keep it as long as they maintain their subscription, though some have reported being prompted to upgrade.
How Disney uses ad revenue
The money Disney collects from advertisers goes directly to the company's operating budget, not to content creators or talent. It helps offset the cost of producing original shows and movies, licensing existing content, and maintaining the streaming platform itself. From Disney's perspective, the ads tier is a way to make the service financially sustainable without raising prices on everyone.
Advertisers pay Disney based on how many people see their ads and, in some cases, how many actually click or engage with them. Premium advertisers might pay more to reach specific audiences—for example, toy companies paying extra to reach households with children. Disney's data about who watches what gives advertisers confidence they're reaching the right people.
Comparing the two Disney Plus tiers
| Feature | Basic with Ads ($3.99/month) | Premium ($10.99/month) |
|---|---|---|
| Ads | 4–5 minutes per hour | None |
| Video quality | Up to 1080p | Up to 4K |
| Simultaneous streams | 1 device | 4 devices |
| Offline downloads | Not available | Available |
| Spatial audio | Not available | Available |
Whether other Disney services have ads
Disney also owns Hulu and ESPN+. Hulu offers both an ad-supported tier ($7.99 per month) and an ad-free tier ($14.99 per month). ESPN+ is ad-free at $10.99 per month, though some sports content carries ads from the sports leagues themselves (not Disney). Disney also bundles all three services together at various price points, with the cheapest bundle including ads on Hulu.
The three services operate independently, so your choice on Disney Plus doesn't affect whether you see ads on Hulu or ESPN+. If you subscribe to the bundle, you can choose the ad tier for Hulu while keeping ESPN+ ad-free.
Frequently Asked Questions
Can I upgrade from the ads tier to Premium without losing my watch history?
Yes. Your watch history, saved shows, and profile settings stay with your account when you upgrade. You straightforward start paying the higher price and stop seeing ads on new content you watch. The change takes effect when ready.
Do I have to watch ads on content I've already started watching?
No. If you're in the middle of a show or movie when you upgrade to Premium, you won't see ads on that content. Ads only appear on new content you start watching after the upgrade.
Why is the Premium tier more expensive than it was before?
Disney raised the Premium price from $10.99 to $13.99 per month in December 2022, the same time it introduced ads. The company cited rising production and licensing costs. Existing subscribers on the original plan were often grandfathered in at the old price, but new subscribers and those who downgrade and re-upgrade pay the new rate.
Can I share my Disney Plus account with family members on different devices if I have the ads tier?
The Basic with Ads tier only allows one simultaneous stream, so only one person can watch at a time. The Premium tier allows four simultaneous streams, making it better for households with multiple viewers. If you need to share across devices, Premium is the practical choice.
Are the same ads shown to everyone, or do they vary by person?
Ads are targeted based on general information like your location and device type, but Disney does not create individual profiles the way some other platforms do. You'll see ads relevant to your region, but not necessarily personalized to your specific browsing history outside Disney Plus.