Disney has reported that 157 million people are streaming its content with ads on its platforms. Besides Disney+, this also includes Hulu and ESPN+.
This is the first time Disney has provided insight into just how many viewers are using ad-supported content. Of the 157 million users, 112 million are domestic, and figures reflect average monthly active users over the past six months.
CNBC reported that it's an indicator of how advertising is becoming more important as a revenue driver for streaming services, which the company continues to work toward establishing a more consistent way of measuring global ad-supported streaming audiences. After all, the advertising is at the heart of Disney's streaming business model, especially now that media firms prioritize profit generation through their platforms.
Mostly, on launching their streaming services, including Disney+, most of them initially gave their services only on subscription-free modes and no ads.
However, over the recent years, Disney has had an ad-supported tier for both Hulu and Disney+, aligning with growing consumer demand for more affordable streaming options. This change is in accordance with a general industry trend to offer cheaper, ad-supported plans that will attract more people.
Disney's CEO Bob Iger said that the company has been guiding its customers toward ad-supported options. Although cable TV has relied on ad revenue for decades, the streaming world is still finding ways to measure and report ad-supported viewership.
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Ad-Supported Subscribers Growth
Disney's streaming services are experiencing rapid growth in ad-supported subscribers.
As of November, Deadline shared that Disney+ had 122.7 million core subscribers, Hulu had 52 million, and ESPN+ had 25.6 million.
The company reported that more than half of new US Disney+ subscribers are choosing the cheaper, ad-supported tier. This bodes well for the future of the streaming service's advertising model. However, the average revenue per user has experienced a slight drop as an effect of the number of customers using the ad-supported options on the rise.
During its fiscal release, all Disney streaming platforms reported that from its joint streaming business, Disney+, Hulu, and ESPN+, it makes $321 million in operating income, which is a huge improvement from the loss of $387 million during the same period in 2023.
On the upcoming fiscal first-quarter earnings report this February 5, Disney will provide further insights into their streaming portfolio's performance and future strategies.
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