Disney+’s ad-supported tier has finally made its way onto Roku, four months after its initial release.
First spotted by NextTV, Disney+’s support page prompts Disney+Basic subscribers (including customers on a bundled version of the ad-supported plan) to update their Disney+ app to the latest version. Once they do, they can start streaming Disney+ with ads on a Roku device.
The reason for the delayed Roku launch remains unclear. In December, a source familiar with Disney’s negotiations told NextTV the company was trying to work out a mutually agreed upon ad-revenue-sharing agreement with Roku.
Roku, when reached by Fierce Video for comment, declined to share any information on the deal. However, the company’s monetization overview page indicates publishers can monetize ad-supported channels by entering an inventory split with Roku.
In that type of deal, the publisher must send 30% of inventory to Roku, but fully controls and retains revenue for the remaining 70%, which is stored in a channel’s ad server. As for transactional channels – those that monetize through subscriptions or in-app purchases – publishers receive 80% of net revenue while Roku retains 20%.
Disney+ with ads, which at $7.99 per month is $3 cheaper than the ad-free version at $10.99 monthly, offers the same content catalog that’s included in the premium plan. Speaking at an investor conference in March, Disney CEO Bob Iger flagged advertising as part of the streamer’s path to profitability, even though ads are “still very new” on Disney+.
“When you think about a relatively reduced ad load, the purity of those brands and the specificity of that audience – and an audience that’s not only very engaged but loyal, it’s an advertiser’s delight,” Iger commented.
Disney’s latest financial earnings don’t break down how many subscribers use the ad-supported tier. The company ended its recent quarter with around 104 million core Disney+ global subscribers, with 44.6 million of those subs in the U.S. and Canada.
The launch of ad-supported Disney+ on Roku also comes as Disney unveiled a new boss for its direct-to-consumer streaming business. As of Thursday, Hulu President Joe Earley replaced Michael Paull as DTC lead, though Earley will continue to head Hulu until Disney names a successor.
Competing streamer Netflix, which introduced its ad-supported version one month before Disney (and costs $1 cheaper at $6.99 per month), has reportedly reached 1 million monthly active users for the tier. At launch, Netflix with ads was missing support for Apple TV, but the streamer last week confirmed the Basic with Ads plan is available on Apple TV’s latest version of the Netflix app.