Disney announced on Wednesday that 157 million people worldwide view ad-supported content on its streaming services, Disney+, Hulu, and ESPN+, each month.
This figure represents the average monthly usage over the previous six months and includes 112 million domestic users.
There is currently no industry-standard methodology for determining the size of the global streaming advertising audience, despite the fact that traditional TV sources have a standard system for calculating ratings and viewership.
According to the firm, the goal of its Disney Advertising unit is to provide a globally uniform technique and approach for estimating the size of the ad-supported audience. At the annual CES tech conference in Las Vegas, a premier gathering for the media and advertising industries, it is giving an update and additional details on its ad-supported streaming business.
Rita Ferro, Disney’s head of global advertising, stated in a news release that the company has the most valuable audiences in ad-supported global streaming at scale and is situated at the nexus of top-notch sports and entertainment programming. We wanted to be the first in our business to provide more transparency into the process by which we estimate the number of monthly active users who are engaged worldwide and funded by advertisements.
“The metric is derived from active accounts across Disney’s three streaming services that have continuously viewed ad-supported shows and movies for more than 10 seconds,” the firm explained in its explanation of the technique. The overall number of users is then estimated by multiplying each active account by the projected number of users per account, it stated. Users who subscribe to multiple platforms may be counted more than once because the estimated active users are added across the apps without de-duplication.
Growth in ad-supported tiers
Making money from streaming has become a top priority for media corporations, and advertising has emerged as a crucial tool for this purpose. Although many platforms started out as subscription services free of advertisements, streaming services have recently offered users more affordable, ad-supported tiers.
Disney is attempting to direct its customers toward its ad-supported tiers, according to CEO Bob Iger. Since launching Disney+ with advertisements in late 2022, the business has increased the cost of commercial-free solutions.
One of the first streaming services to provide an ad-supported option was Disney’s Hulu. Disney+ added an ad-supported tier more recently.
Disney reported that, excluding Disney+ Hotstar in India and other countries in the region, it had 122.7 million Disney+ Core customers in November. There were 52 million subscribers to Hulu and 25.6 million paying customers to ESPN+.
Executives on the November earnings call stated that over half of new Disney+ subscribers in the United States were selecting the less expensive, ad-supported tier, which bodes well for the future. Historically, the company has not disclosed the precise number of subscribers on each platform that pay for the ad-supported option.
During the call, Disney reported that a greater mix of customers on its more affordable, ad-supported tier and wholesale services caused the average income per user for domestic Disney+ customers to decline from $7.74 to $7.70.
In November, executives expressed their confidence that streaming will be a major area of growth for the business.
The firm stated at the time that its combined streaming division, which consists of Disney+, Hulu, and ESPN+, generated $321 million in operating income for the September month, as opposed to $387 million in the same period the previous year.
Before the bell on February 5, Disney will release its fiscal first-quarter profits.
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