Two years ago, Disney+ launched a new ad-supported tier in the United States, offering all of its movies and shows at a cheaper price but with commercials.   The ad-supported tier is also slowly being rolled out to more countries around the world.

The ad-supported tier features advertising from brands and from all major agency holding companies, including Dentsu, Havas, Horizon, IPG, Omnicom Group, Publicis, RPA, Stagwell and WPP, which represent over a dozen categories, including (retail, apparel, autos, financial services, restaurants, technology, telcom, CPG, travel).

There are some slight downsides for the ad-supported tier, as they don’t get access to some premium features such as Downloads, SharePlay, Dolby Atmos or some of the curated playlists.

Recently, during the Walt Disney Companies quarterly financial, CEO Bob Iger revealed that 37% of Disney+ subscribers in the United States and 30% of Disney+ subscribers globally have the ad-supported tier.

“It’s not just about raising pricing.  It’s about moving consumers to the advertiser-supported side of the streaming platform. Right now, in the United States, about 60% of all new subs are buying our streaming services advertising-supported, or AVOD. Right now, I think it’s 37% of total subs in the U.S. are AVOD subs – 37% in the U.S. and 30% globally. So, the pricing that we recently put into place, which is increased pricing, was actually designed to move more people in the AVOD direction because we know that the ARPU [average revenue per user] – and the interest from advertisers in streaming – has grown.

However, it seems Bob Iger might have made a mistake in revealing those numbers, as it is unusual for Disney or any other streaming service to openly talk about how many people are on their ad-supported tier.   Shortly after he said that to investors, he was heard saying on the webcast in a hot mic moment:

“I don’t know if I was supposed to disclose those AVOD numbers,”

The ad-supported tier of Disney+ is expected to continue to grow, as more new subscribers are signing up to this tier, and Disney is actively trying to encourage more existing customers to shift over to the ad-supported tier with continuous price rises to its ad-free tier.  Disney also generally only runs promotions for its ad-supported tier, such as a Black Friday offer, or when it’s bundled with cable.

Roger’s Take: The ad-supported numbers being revealed might cause some issues for the advertising department, but generally, this won’t make any difference to subscribers.  Moving forward, we will likely continue to see that ad-supported tier subscriber numbers grow, as the price difference between the ad-free offering gets further and further apart.  I also wonder if, eventually, when Hulu and Disney+ merge, we’ll see a flood of new ad-supported customers since most Hulu subscribers are on the ad-supported tier.

What do you think of this reveal?  Let me know on social media!

Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

View all posts