Disney Streaming Hits Major Milestone: 157 Million Users on Ad-Supported Tiers
In a big move that reveals the future of streaming, Disney has officially announced that 157 million people globally are now streaming content on its ad-supported platforms, including Disney+, Hulu, and ESPN+. This is a significant shift for the company, as it marks the first time Disney has shared insight into just how many viewers are opting for cheaper, ad-supported options over ad-free plans. And while it’s a milestone for Disney, it also signals a larger trend in the streaming industry.
This figure represents a combination of users who have been streaming content with ads for the last six months. This includes 112 million viewers within the United States, which highlights the massive reach Disney’s streaming services now have—thanks to their ad-supported offerings.
But why is this such a huge deal? Let’s take a deeper dive into how this will impact Disney and the broader streaming landscape.
The New Era of Streaming: Ads Are Driving Profits
Over the past few years, streaming services have been making a strategic pivot to ad-supported tiers as a way to boost profits. Traditionally, streaming services were ad-free, relying solely on subscription fees to generate revenue. But with intense competition and rising content costs, many platforms, including Disney, have found that introducing a cheaper, ad-supported option is a smart way to bring in more users while also making money from advertisers.
Rita Ferro, Disney’s president of global advertising, explained, “Disney sits at the intersection of world-class sports and entertainment content, with the most high-value audiences in ad-supported global streaming at scale.” This means that Disney isn’t just offering ads to viewers—it’s reaching some of the most desirable audiences for advertisers, including sports fans and entertainment enthusiasts.
The announcement comes as Disney is seeking to expand its advertising revenue. With platforms like Hulu and Disney+ increasingly offering ad-based models, the company is working to attract more customers to its cheaper tiers while keeping its advertising rates high. By offering viewers access to popular content at a lower price with ads, Disney has found a way to boost engagement and revenue simultaneously.
How Disney Tracks Ad-Supported Viewers
So, how does Disney measure the success of its ad-supported model?
The company has developed a new methodology for tracking how many users are watching content with ads. According to Disney, the number of “active users” is calculated by looking at accounts that have watched ad-supported content for at least 10 seconds. These accounts are then multiplied by the estimated number of users per account—this includes families or shared accounts, meaning more than one person might be watching through a single account.
Disney’s measurement is a bit unique because they don’t “de-duplicate” accounts. So if a user subscribes to multiple Disney platforms like Disney+ and Hulu, they could be counted multiple times. This methodology is part of Disney’s effort to bring more transparency to the advertising industry, which has historically lacked an agreed-upon standard for measuring streaming viewership.
Is Disney’s Strategy Paying Off?
As Disney continues to push its ad-supported streaming options, it’s seeing notable growth. In fact, the company recently shared that more than half of new U.S. Disney+ subscribers are now opting for the cheaper, ad-supported tier. This trend bodes well for the future, as it shows that users are not only becoming accustomed to ads in their streaming experience but are also willing to pay less for the privilege.
During its most recent earnings call in November, Disney revealed that average revenue per user (ARPU) for Disney+ had dropped slightly, from $7.74 to $7.70, but this was largely due to the increased mix of customers on the ad-supported tier. However, Disney executives remain confident that this strategy will lead to future profitability. By growing its ad-supported audience, Disney is positioning itself to make substantial gains in ad revenue, which could help fund its expensive content investments.
Growth in Streaming Subscribers: How Disney Is Competing
Disney’s decision to focus on its ad-supported platforms comes at a time when many companies in the streaming industry are struggling to maintain profitability. As more users gravitate toward cheaper options, Disney is seizing the opportunity to attract a wider audience.
Currently, Disney+ has 122.7 million subscribers, excluding Disney+ Hotstar (which operates in India and surrounding regions). Hulu has 52 million subscribers, and ESPN+ has 25.6 million. While these numbers are impressive, Disney has been making strategic moves to grow them further. For instance, in November, Disney raised the prices of its ad-free options while pushing more people toward the cheaper, ad-supported tiers. This shift could allow Disney to profit both from subscriptions and ad revenue.
And while some other streaming services have followed suit by launching their own ad-supported tiers, Disney’s deep content library—including its sports programming, Disney classics, and exclusive shows—gives it an edge in attracting viewers willing to watch ads in exchange for more affordable prices.
Looking Ahead: Will Ads Continue to Dominate?
As the streaming industry matures, ads will likely continue to play a major role in driving profits for platforms. While many viewers still prefer the ad-free experience, the rise of ad-supported options shows that many are open to compromise in exchange for cheaper subscriptions.
Disney, with its diverse streaming platforms and rich content portfolio, seems well-positioned to capitalize on this shift. But other players, such as Netflix, Amazon Prime, and HBO Max, will also be watching closely to see if the ad-supported model becomes the new normal for streaming.
As more platforms experiment with pricing models, it’s possible that viewers will have to make tough choices about which content they’re willing to pay for—and how much advertising they’re willing to tolerate in exchange for lower fees.
What Does This Mean for the Future of Streaming?
Disney’s big move to embrace ads in its streaming platforms is a sign of the times. As traditional revenue models like subscriptions are under pressure, advertising is quickly becoming the key to sustainable growth in the streaming business. Disney’s ability to successfully juggle both ad revenue and subscriptions could serve as a blueprint for other streaming giants.
While the ad-free experience will always have its place, streaming platforms will likely continue to experiment with ad-supported models. Disney’s move to embrace ads could lead to further changes in the market, with more platforms offering lower-cost options to cater to price-sensitive users.
In short, if you’re a fan of Disney’s content but don’t mind watching a few ads, you’re likely to see even more options on the horizon. Whether or not this becomes the dominant model across the streaming world remains to be seen—but one thing is for sure: ads are here to stay.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.