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The Street

Disney+ Is Open to Advertising, With a Few Big Exceptions

In a recent earnings call, Disney CEO Bob Chapek confirmed what’s been obvious for a while. Everyone loves Disney.

Well, that’s not exactly true. In these highly partisan times, there’s plenty of arch-conservatives, some of them former Disney fans, who view the company as some sort of cultural enemy for denouncing Florida’s “Don’t Say Gay,” bill. 

And as long as Disney  (DIS Get Walt Disney Company Report has been popular, there’s always been disaffected teenagers and curmudgeonly types who make a big show out of complaining that the company is too cheerful. (Many of these disaffected teenagers likely live in Orlando, Fla., home of Disney World.)

It’s fair to criticize the company for arguably owning too many popular culture entities to the extent that it has a borderline monopoly on the entertainment industry. But, come now, if there’s nothing the company owns that brings you joy, you’re likely either trying too hard to appear refined or you’re straight-up anhedonic.

Simply going to nearly any public space and looking around will reveal that plenty of adults love Disney’s Marvel and Star Wars films, and they proudly wear the t-shirts to prove it.

Chapek is grateful for this love, and is planning on introducing more “general content” to the Disney+ streaming service that will appeal to these adults, and recently introduced parental control features to some of its more violent, adult-oriented Marvel shows.

“It's certainly popular with families, but as a reminder, almost half of Disney+ subscribers are adults without kids,” said Chapek in the call.

That said, Disney is still Disney, and Chapek has made it clear that it will continue to prioritize its family-friend image above everything else, and that extends to the advertisement it's willing to accept on its streaming service. 

Disney+ Is Ready for Ads…But Not All Ads

In the earnings call, Chapek reconfirmed that Disney will soon introduce a new, advertisement-supported tier for Disney+, both in order to raise revenue to offset the rising cost of production for its various TV shows and films, but also to make the service more accessible to people.

“The Disney+ ad tier… I think this is going to give us the ability to reach an even more broad audience as we expand Disney+ across multiple price points,” he said on the call. 

“And using some of our other services, we can see the additive nature of an ad-driven service that enables us to keep the price lower. Of course, that's made up for by the additional revenue that we would get per user on the advertising spending.”

It’s not exactly clear when the advertising supported tier will launch, nor what it will arrive at. But as part of the television industry’s annual upfront, in which TV networks and streaming service present their wares for the next year to investors, critics and advertisers, Variety reported that “Disney has already signaled to agencies” that there will be limits on what sort of ads it will take.

What Kind of Ads Will Disney Not Accept?

Disney will reportedly not run advertisements for alcoholic beverages, as per its family-friendly image.

It will also not take political advertising of any kind. (Chapek no doubt wishes he could avoid politics altogether, one imagines.)

Advertisements for other streaming companies will also be a non-starter, which has basically been company policy since Disney stopped running ads from Netflix on entertainment networks like ABC and FX.

Disney as a company has always had a cautious relationship with advertising, perhaps out of difference to parent’s groups wary of exposing children to too many commercials. Disney Channel opts for sponsorship messages over traditional ads, and Disney Junior, which is aimed at younger children, doesn’t run any commercials.

Disney + “will also be cautious about running commercials alongside shows aimed at pre-school audiences,” and will not run ads at all when the user profile indicates that a young child is watching.

Ads on Disney+ will run an average of four minutes per hour, putting it just a touch below NBCUniversal’s Peacock  (CCZ Get Comcast Corp. Report and Warner Bros. Discovery’s HBO Max  (WBD Get WARNER BROS. DISCOVERY, INC. Report.