In a groundbreaking disclosure, Disney revealed that its streaming platforms, encompassing Disney+, Hulu, and ESPN+, are now home to 157 million monthly active users who consume ad-supported content. This figure, calculated as a six-month average, represents Disney’s expansive reach in a crowded streaming landscape, with 112 million of these users based in the United States alone.
The announcement was made at the Consumer Electronics Show (CES) in Las Vegas, where Disney’s executives shed light on their efforts to redefine how global streaming audiences are measured for advertising purposes. Unlike traditional television, which relies on well-established metrics for viewership, streaming lacks a universal methodology. To address this gap, Disney’s Advertising unit has devised a proprietary system for estimating ad-supported audience size. By introducing this methodology, Disney aims to provide advertisers with reliable insights while setting a new standard for the industry.
The methodology calculates active users by identifying accounts that have viewed ad-supported content for a minimum of 10 seconds continuously. The number of active accounts is then multiplied by an estimated user count per account. While this approach captures the breadth of Disney’s audience, it does not account for duplication, meaning users who subscribe to multiple platforms may be counted more than once. This underscores the complexity of measuring viewership in an era where overlapping subscriptions are common.
Rita Ferro, President of Global Advertising at Disney, highlighted the significance of this initiative. “Disney’s unparalleled combination of sports and entertainment content positions us as a leader in ad-supported streaming on a global scale,” she said. Ferro emphasized that transparency and accountability are at the core of Disney’s efforts, noting that the new metrics provide a clearer picture of audience engagement for advertisers and stakeholders alike.
Disney’s pivot toward ad-supported tiers reflects broader industry trends. In the early days of streaming, platforms primarily relied on ad-free subscriptions. However, rising costs and competitive pressures have prompted many companies, including Disney, to diversify their revenue streams by introducing ad-supported options. Hulu’s long-standing success with this model provided a blueprint for Disney+, which launched its ad-supported tier in late 2022. This move aligns with CEO Bob Iger’s vision of steering more users toward affordable, ad-supported plans.
During Disney’s November earnings call, executives reported that more than half of new U.S. Disney+ subscribers were choosing the ad-supported tier. This shift is accompanied by strategic price increases for ad-free plans, further incentivizing users to explore the more economical option. As of November, Disney+ Core subscribers totaled 122.7 million, excluding Disney+ Hotstar users in India and other Asian markets. Hulu and ESPN+ added 52 million and 25.6 million subscribers, respectively.
While Disney has not disclosed precise figures for ad-supported subscriptions, the overall trend indicates strong consumer interest. Despite a slight decline in average revenue per user (ARPU) for domestic Disney+ subscribers—dropping from $7.74 to $7.70—the profitability of ad-supported models is evident. The September quarter saw Disney’s combined streaming segment achieve $321 million in operating income, a significant improvement from a $387 million loss in the same quarter the previous year.
As Disney looks ahead to its February 5 earnings report, its focus on ad-supported streaming remains integral to its growth strategy. By leveraging its extensive content library and pioneering new measurement standards, Disney continues to set the pace in the global streaming market. With 157 million ad-supported users, the company is redefining what’s possible in a rapidly evolving industry.
