In a significant revelation, Disney has announced that its ad-supported streaming platforms have reached an impressive milestone, with 157 million global monthly active users engaging with content. This figure, representing an average calculated over the past six months, highlights Disney’s remarkable reach across its three major platforms: Disney+, Hulu, and ESPN+. The domestic market accounts for 112 million of these users, solidifying Disney’s leadership in the United States’ competitive streaming arena.
The announcement took center stage at the Consumer Electronics Show (CES) in Las Vegas, where Disney underscored its efforts to bring clarity to audience measurement in streaming. Traditional television has long relied on established metrics to gauge viewership, but the streaming industry lacks a standardized methodology. In response, Disney’s Advertising division has introduced a robust framework to estimate ad-supported audience sizes, reflecting its commitment to transparency and accountability. This proprietary system is designed to address the complexities of the streaming landscape and provide advertisers with actionable insights.
Rita Ferro, Disney’s President of Global Advertising, highlighted the company’s unique position in the market. “Disney’s unparalleled combination of sports and entertainment content enables us to deliver high-value audiences at scale,” she said. Ferro emphasized the importance of this initiative, noting that it sets a precedent for the industry while enhancing the confidence of advertisers and stakeholders.
The methodology employed by Disney identifies active accounts that have streamed ad-supported content for at least 10 seconds. These accounts are then multiplied by an estimated number of users per account to arrive at total audience figures. However, the metric does not account for duplication, meaning that users subscribing to multiple platforms may be counted more than once. This approach provides a comprehensive overview of engagement but also highlights the challenges of precise measurement in a fragmented market.
Disney’s strategic pivot to ad-supported tiers reflects a broader industry trend. Initially focused on subscription-only models, streaming platforms are increasingly adopting hybrid revenue strategies that incorporate advertising. Hulu’s longstanding success with ad-supported subscriptions has paved the way for Disney+ and ESPN+ to follow suit. In late 2022, Disney+ launched its ad-supported tier, offering a lower-cost alternative to attract a wider audience.
CEO Bob Iger has championed this approach, which includes strategic price increases for ad-free plans to encourage adoption of ad-supported options. During the company’s November earnings call, executives noted that more than half of new Disney+ subscribers in the U.S. were choosing the ad-supported tier. This shift reflects changing consumer preferences, with many seeking affordable access to high-quality content. As of November, Disney+ Core had 122.7 million subscribers, excluding Disney+ Hotstar, while Hulu and ESPN+ recorded 52 million and 25.6 million subscribers, respectively.
The financial impact of these developments is evident. Although the average revenue per user (ARPU) for domestic Disney+ subscribers dipped slightly from $7.74 to $7.70, the overall profitability of ad-supported models has grown. In the September quarter, Disney’s streaming segment reported $321 million in operating income, a dramatic improvement from the $387 million loss reported during the same period in the previous year.
As Disney gears up for its fiscal first-quarter earnings report on February 5, the focus on ad-supported streaming remains a key driver of growth. By combining an expansive content library with innovative measurement tools, Disney is redefining the standards of engagement and transparency in the industry. With 157 million global users now participating in its ad-supported ecosystem, the company is setting the stage for continued success in the rapidly evolving streaming landscape.
