Netflix Ignites Ad-Supported Plans... Disney+ Joins In

Introduction Following Hulu and Netflix
Sequential Rollout Expected Starting in the US...
Existing Plans in Korea to Increase by $3 Before Changes

[Asia Economy Reporter Minyoung Cha] Disney Plus (+) has joined the ad-supported subscription plans launched by global online video service (OTT) Hulu and popularized by Netflix.

On the 8th, Disney Plus (+) announced the introduction of a 'Basic Plan' priced at $7.99 per month. The plan involves watching 15 to 30-second ads over a 4-minute period within one hour of content. The service will start in the United States and will be gradually rolled out to countries including South Korea. Disney Plus stated, "We are offering a new ad-supported subscription service with over 100 advertisers," adding, "This provides viewers with more subscription options."

Alongside this, Disney+ raised the price of its existing ad-free premium plan by $3, setting it at $10.99. It is expected that Disney Plus Korea's subscription fee, currently 9,900 KRW per month, will also inevitably increase. A representative from Disney Plus Korea said, "We have not yet received any official communication regarding the pricing plans."

Netflix lowered its subscription fees when introducing its ad-supported plan, whereas Disney has increased its prices. Disney+'s new ad-supported plan is priced $1 higher than Netflix's ad-supported 'Basic with Ads' plan, which costs $6.99. In South Korea, Netflix's ad-supported plan is priced at 5,500 KRW per month, which is 4,000 KRW cheaper than the ad-free 'Basic' plan priced at 9,500 KRW. Bob Chapek, Disney's CEO who has stepped in as a savior for Disney, expressed that improving profitability is more urgent than increasing subscribers, which reportedly led to the price hike.

The first to take the lead in the global OTT industry was Hulu. Netflix CEO Reed Hastings recently mentioned Hulu's case at the DealBook conference hosted by The New York Times, saying, "Not moving quickly on the ad-supported plan strategy was a mistake on my part." Hulu is one of Disney's OTT services alongside Disney+ and ESPN.

Meanwhile, domestic and international OTT companies, which have been recording consecutive losses, are also considering introducing ad-supported plans. Disney's streaming division posted a net loss of $1.47 billion (approximately 2 trillion KRW) in the third quarter (July to September), more than double the amount from the same period last year. The domestic OTT industry is also struggling with losses. South Korea's leading OTT service Tving's cumulative net loss for the third quarter this year reached 65.2 billion KRW, already surpassing last year's net loss of 59.4 billion KRW. Wave also recorded a net loss of 98.2 billion KRW by the end of the third quarter this year, exceeding last year's loss of 52.5 billion KRW.