Disney to launch cheaper ad-supported service in UK

Disney+ plans to launch a new, cheaper streaming option with adverts in the UK in November as profits continue to fall at the business.

The plan, which is already available in the US, will also be introduced to parts of Europe as well as Canada.

The new tier will cost £4.99 per month in the UK, but existing customers face a £3 price rise to keep current perks.

It also plans to crack down on password sharing, following similar action taken by rival Netflix.

Disney is facing a range of issues including lacklustre film performance and a sharp drop in advertising sales in its traditional television business.

Overall, revenue at the company grew by 4% year-on-year in the three months ending 1 July, but it posted a loss of $460m (£361m), compared to a $1.4bn profit in the same period last year.

There is currently only a single price tier for Disney+ in the UK, which costs £7.99 per month, but come November there will be three new tiers available. These are:

All UK subscribers currently enjoy the benefits offered by the new premium service, so its introduction will effectively represent a £3 per month price increase for people who want to keep the same features.

The introduction of Disney's ad-supported service follows a similar move by rival Netflix last year.

It was among a number of measures brought in by Netflix, the market leader, after growth in subscriber numbers began to falter in 2022.

The streaming giant also cracked down on account sharing, something Mr Iger said Disney now planned to do.

The company spotlighted progress in its streaming business, where losses were cut in half from a year ago to about $500m in the three months to 1 July.

Subscriptions to its core Disney+ service grew 1% to 105.7 million, as growth internationally offset a 1% decline in the US.

However, Disney acknowledged that the performance of some recent films - which included a new live action Little Mermaid and Guardians of the Galaxy Vol 3 - had been "disappointing".

It also said its Disney Hotstar service in India, which has been struggling since losing the right to show cricket matches, saw subscriptions plunge 24%, while other offerings, including ESPN and Hulu saw little change.

Insider Intelligence analyst Paul Verna said the company's "mixed results" would do little to calm investors "anxious for clarity on the company's strategy for its streaming services and TV networks".

"While it's encouraging that Disney narrowed its streaming losses in the past quarter, it did so mostly through massive reductions in workforce and content spending, rather than through organic growth."

The company said that visitor numbers had flagged at its amusement park in Florida, where Governor Ron DeSantis has been feuding with Disney over what he describes as "woke" policies.

But Disney executives downplayed the decline, saying it reflected wider trends, including a return to normal after the pandemic and a fall in international travel.

Chief executive Bob Iger, who recently re-joined the company to help boost growth, said he knew the firm had "work to do".

"I'm incredibly confident in Disney's long-term trajectory," he told investors on Wednesday.