After months of speculation by pundits, Disney+ is finally sharing details about its new AVOD, which will launch in the US on December 8.

Operating in a cluttered streaming market and with inflation on the rise, Disney and Netflix have both made moves to create a lower-cost option with ads for consumers who don’t mind that viewing experience.

The new tier will launch simultaneously on Disney+, Hulu and ESPN+. It’s priced at $7.99 a month on Disney+ (ad-free is US$10.99) and Hulu (ad-free is US$14.99). ESPN’s pricing was not available at press time.

Disney is also providing an option for consumers to bundle Disney+ and Hulu together with ads for US$9.99 a month, and all three platforms for US$12.99.

The media giant recently hit 221 million total paid subscribers across all of its streaming services, according to the Q3 financial report it released yesterday. This puts Disney ahead of Netflix, which reported 220 million total subscribers in its last quarter.

The AVOD tier launch could help Disney continue to grow its direct-to-consumer business, which saw a 19% year-over-year revenue increase in Q3 to US$5.1 billion. But the segment also posted a higher operating loss of US$1 billion (up from US$800 million in Q3 2021), due to higher programming, product, tech and marketing costs that were only partially offset by the increase in subscribers.