Disney+ will introduce a lower-cost ad-supported version of its streaming service later this year.

• Disney announced a new ad-supported tier for its Disney+ streaming service on Friday.
• The new tier from Disney has not been launched yet, with no specific date or cost announced, but it is expected to be released later this year.
• By adding an advertising-support tier, Disney can increase its average revenue per user, which currently lags behind its competitors.

Disney revealed on Friday the introduction of an ad-supported version for its Disney+ streaming platform, which will become available in the U.S. later this year.

The new ad-supported tier will be launched internationally in 2023, but Disney has not disclosed the launch date or price for the new tier.

The company announced in a press release that the new offering would be a crucial component in achieving its objective of having between 230 million to 260 million Disney+ subscribers by 2024.

Adding an advertising-support tier will enable Disney to increase its average revenue per user, which currently lags behind its competitors. According to CEO Brian Roberts, NBCUniversal's Peacock had an ARPU of nearly $10 per month per user, primarily driven by advertising. In contrast, the average revenue per user per month for Disney+ in the U.S. and Canada was $6.68 last quarter.

Advertising-supported streaming options are available on streaming services such as HBO Max, Paramount+, and Discovery+.

Disney is currently offering an ad-supported version of Hulu for $6.99 per month, while its ad-free version costs $12.99 per month. The company is working on streamlining its backend technology to enable advertising on all of its streaming products.

Disclosure: Comcast is the owner of CNBC parent company NBCUniversal.