Streaming Wars: Will Netflix, Disney+ Win or Lose Subscribers With Ads?

Netflix and Disney+ both plan to offer subscribers new, ad-supported plans as competition between the popular streaming services heats up.

Disney+ stocks surged on Wednesday after the streaming platform announced that 14 million new subscribers had joined the service during the second quarter of 2022. The total number of Disney streaming subscribers—including those using Disney+, ESPN+ and Hulu—is now 221.1 million worldwide, surpassing the 220.67 million global total for Netflix.

All of the services hope to increase future subscriptions by offering lower priced, ad-supported subscriber tiers. However, it is not clear if all current subscribers who are used to ad-free Disney+ and Netflix will retain the services if the lowest price option includes ads.

Disney+ announced that its ad-supported plan would launch on December 8, at a cost of $7.99 a month—the current price for an ad-free subscription. Subscribers who want to remain ad-free will need to adjust to what is now called the "premium plan," which is offered at the significantly higher price of $10.99 a month.

In a tweet announcing the new ad-supported plan and pricing tiers, The Walt Disney Company described the changes as "much-anticipated" and "delivering more choice to consumers than ever before."

Replies to the Disney tweet suggested that many thought the changes were neither anticipated nor poised to offer anything of value to current subscribers.

"'Pay more or you get ads,'" replied Twitter user @the_d_delane. "The Disney Difference."

"You guys literally killed Hulu with the amount of ads you push, I fear that Disney plus is going to be just as bad," tweeted @Ozziepez88. "Literally no one other than the CEOs are anticipating this."

"You will be losing subscribers with this increase," @BeatrizRuiz80s tweeted alongside a "thumbs down" emoji.

In a statement obtained by Newsweek, Disney Media & Entertainment Distribution Chairman Kareem Daniel said that the new ad-supported plan and "an expanded lineup of plans across our entire streaming portfolio" would provide "greater consumer choice at a variety of price points to cater to the diverse needs of our viewers and appeal to an even broader audience."

Details of the changes for Netflix, which has been losing subscribers this year rather than gaining them, are currently unclear. While the streaming giant's ad-supported plan is expected to launch early next year at a lower price point than ad-free plans, the company has not yet announced prices or whether the new plan will be accompanied by price hikes for ad-free tiers.

Netflix Chief Operating Officer Greg Peters said during a quarterly earnings interview in July that offering the ad-supported plans would benefit the company overall, according to Deadline.

"We know there's some price sensitivity around consumers," Peters said, according to Deadline. "We're quite optimistic... It's not like all of a sudden all folks on ad-free Netflix are going to join ad Netflix. Supply-demand works in our favor, both in terms of geography and in terms of opening up the aperture."

Some Netflix users have already threatened to cancel their subscriptions when ads are introduced.

"If netflix starts showing ads i am going to smash that cancel button," TechCrunch+ Editor-in-Chief Alex Wilhelm tweeted on June 27.

A non-scientific poll tweeted by The Next Web one day earlier found that 86.6 percent of respondents would cancel their Netflix subscriptions "if it introduced ads."

Newsweek reached out to Netflix for comment.