Disney+ has told its Australian subscribers they can expect to see ads from next month on the platform.

The firm, which has circa 3.1 million Australian subscribers according to Telsyte estimates, has held out on a local ads launch while rivals pile in.

However, the global announcement two weeks ago by Disney+ bundling ESPN content into its subscription streaming service ‘at no extra cost’ appears to have triggered an update to its subscriber terms and conditions giving the platform wriggle room on carrying ads, i.e. across all of its tiers, ad free or otherwise, because some ESPN programming – particularly live sports – will likely carry ads because these are served on a pass through basis.

At the same time, the streamer is also hiking prices, with its Premium package increasing 17 per cent to $20.99 per month. Foxtel and Kayo will maintain their existing ESPN distribution rights, as will Fetch.  

Per an email to Australian subscribers: “In advance of the launch of ESPN on Disney+ … We’re clarifying that, as we continue to increase the breadth and depth of the content we make available to you, circumstances may require that certain titles and types of content include ads, even where the subscription tier is indicated to be 'no ads' or 'ad free'”.

(That change is required because previous marketing has centred on the fact that the service would be 'ad-free'. The subscriber update also noted some streamlining of its terms and conditions, understood to be related to Australia's privacy act overhaul.)

Disney stated the new terms would kick in from 26 March for existing subscribers and had already come into effect – as of 15 February – for new subscribers.

Timing issue

Media buyers said that the platform had not been pitching rates or numbers, with “no big push” to signal the launch of any ad tier proper.

But Disney+ is switching on its ad business around the world while building out adtech infrastructure to service it. Turkey was last week the latest market to go live, taking the number of countries with ‘standard with ads’ packages to 13, alongside the US and Canada, where it launched ads in late 2022.

Meanwhile CEO Bob Iger has previously stated that price hikes are “designed to move more people in the AVOD [advertising-supported video on demand] direction”, telling analysts in November that circa 60 per cent of all new subscribers in the US are opting for the Disney+ ad tier. Across its total subscriber-base Iger said “37 per cent in the US and 30 per cent globally” are now on ad tiers. It's uncertain why the Australian unit has been slow to roll out an ad tier offer here, particularly given global and local rivals are moving fast.   

Disney last month claimed it has 157m monthly active users globally within its combined ad tiers on Disney+, Hulu and ESPN+. Growth in those ad tiers, alongside price increases, has helped the streaming business become profitable since mid-2024 after years of heavy losses. Earlier this month the company reported that first quarter 2025 profit from streaming was US$293m – despite shedding 700,000 subscribers. It made US$321m in Q4 2024, up from US$47m in Q3, its first ever quarterly streaming profit.

Amazon bites BVOD

Disney’s update comes as global streaming platforms ramp up Australian advertising operations, creating a flood of new video inventory and increasing pressure on local incumbents.

Earlier this month Netflix confirmed it is killing off its basic ad-free plan, adopting the approach taken by Foxtel with Kayo and subsequently by Amazon Prime in rolling out local entry-level ad tiers subscriptions – i.e. everyone gets ads unless they pay extra, driving more immediate scale. Ampere Analysis subsequently forecast Netflix would become the third largest ad-supported streamer in Australia by 2027, taking $150m-plus in annual advertising revenue via 2 million ad-tier subscribers by that point.

But Amazon might have a say in that trajectory. While there are questions around how many streaming ads are being consumed on Prime Video per user, agencies have suggested the ability to link those ads directly to sales on Amazon.com is leading retail and brand advertisers to funnel broader BVOD and CTV buys through the Amazon demand-side platform (ADSP). For some, that means Amazon is becoming the de facto entry point for broader BVOD and CTV buying.

Such a shift could carry further impacts for local TV networks and the ad supply chain – particularly independent DSPs like The Trade Desk if Amazon starts to erode their  share and margin as it has with BVOD's pricing.

“For some of our endemic clients’ activity [i.e.retailers and brands that already sell via Amazon.com] where their Amazon business is large enough, we're actually seeing Amazon’s demand-side platform becoming a really attractive DSP for them to use for all their BVOD activity – because of how the buying measurement now helps them,” Mohammad Heidari-Far, MD at Omnicom commerce agency Flywheel told Mi3 earlier this month.

“They're bringing all of their BVOD activity over to Amazon DSP so that they can frequency cap and everything else – but also see the impact and measurement on Amazon sales,” he said.

“That goes beyond the current ecosystem and can impact the overall BVOD market. So that is the Trojan horse, I would say, for a lot of endemic clients.”

Further competitive pressures are likely as fresh dealmaking is set to bring global AVOD ventures to the Australian market in coming weeks.

Double bubble

Omnicom chief operating officer Kristiaan Kroon last year told Mi3 that a “second wave” of streamers would pose challenges, with “probably twice as many” top tier players in market by the end of Q3 2025.

He forecast the main streaming ad tiers to this year take “probably over” $200m in advertising revenue, with Amazon and Foxtel’s Kayo and Binge taking the lion's share due to audience scale, local sales operations and “sophisticated” data infrastructure.

By contrast, “Disney+ would have to build that in this market if they don't partner with someone”.

Either way, he questioned whether the local ad market in the medium-term could sustain that many top-tier streamers.

Disney's local spokesperson declined to comment on market expectation of an ad launch proper in the second half.