Disney+ has announced that they will be adding an ad-supported viewing option to their streaming service later this year. With a slowing of their audience growth, they are hoping this will help boost their subscriber uptake again.  

But is AVOD a good idea for the brand? 

Advertising-based Video on Demand or ad-supported streaming means that much like traditional TV, ads/commercials will be inserted into your viewing experience. We see AVOD currently on sites like YouTube and Tubi.  

And while one of the main perks of streaming services has always been the lack of commercials the viewer has to sit through, AVOD knocks down the monthly subscription cost significantly. 

Disney company has done this for years with their subsidiary streaming service Hulu. They offer a regular streaming service option as well as a reduced cost option that includes ads within your viewing. The price of the ad-supported option is almost half of the original plan, which is clearly a draw for those who don’t mind a few ads.

So, much like with Hulu, is this a good move for Disney+?  

The Verge commented that it will be much trickier for this platform specifically, “while Hulu — Disney’s “grown-up” streaming service — has some flexibility with the kinds of ads it can run against The Handmaid’s Tale or Archer, Disney knows it needs to be extraordinarily picky about the types of advertising it’s throwing on its kids and family service.”  

The parameters around advertisements will need to be much clearer to ensure that children will be protected from harmful messaging. Because the nature of the service is family-oriented, the ads placed on this platform will need to be targeted with precision.  

It’s clear they will need to be careful, and not only on the content itself but on how they insert these ads.  

Inserting an ad during a fade out scene in an episode of Modern Family will be easy, but with movies like the Star Wars franchise or some of Disney’s classics, it will be much more difficult. No one will be receptive to an ad as Mufasa falls off the cliff in The Lion King.  

But if Disney does it right, AVOD is a good option for everyone.  

Streaming services offering more options for viewers and advertisers opens up a lot of possibilities. They become more accessible to consumers while also allowing advertisers to penetrate a unique market, seemingly lost through the decline of linear TV.  

And as more streaming services launch and grow, all eyes are on Netflix. In the past they have always taken a stance against ads but after the announcement of Disney+, Netflix CFO Spencer Neumann was quoted as saying, “never say never.”  

It’s clear there is going to be more options in streaming moving forward, and so long as both the services and advertisers are precise about the types of ads and where they are inserted, it’s a great opportunity to reach new audiences.