During the latest earnings call, Disney CEO Bob Iger inadvertently disclosed significant information regarding the ad-supported tier of Disney+ subscribers.
Realizing his error, he followed up with, “I don’t know if I was supposed to reveal those AVOD [Ad-based Video On Demand] figures” …
Deadline reports.
In response to a question from a Wall Street analyst concerning the growth forecast and pricing strategy for Disney+, Iger mentioned that 37% of Disney+ subscribers in the U.S. and 30% globally are on the ad-supported tier. This kind of transparency is rare within the streaming industry; for example, Netflix has never shared a similar breakdown.
As the Q&A session progressed and CFO Hugh Johnston started replying to the next analyst question, Iger unexpectedly interjected, stating, “I don’t know if I was supposed to disclose those AVOD figures,” before Johnston continued his answer.
Iger was notably frank about the pricing strategy, indicating that Disney+ subscription costs have significantly increased since its initial launch.
In December last year, Disney raised the standard subscription price for Disney+ from $7.99 to $11.99, while introducing a new $7.99 tier branded as Disney+ Basic, which includes advertisements.
Subsequently, prices further escalated to $13.99 and then to $15.99 as of last month, effectively doubling the cost since the service was launched.
Iger noted that the steep increases in standard tier pricing were partly intended to encourage more users to switch to ad-supported subscriptions, given their increased profitability for the company.
“It’s not merely about raising prices,” he elaborated. “It’s about steering consumers towards the advertiser-supported side of the streaming platform […] The recent pricing adjustments were actually aimed at urging more subscribers towards AVOD because we recognize that ARPU [average revenue per user] – and interest from advertisers in streaming – has expanded.”
Currently, Apple TV+ does not offer an ad-supported tier but has experienced similar price hikes, now set at $9.99 per month.
Photo by Thibault Penin on Unsplash
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