Disney CEO Bob Iger was caught in a hot mic moment as he disclosed something we don't think he meant to disclose to investors about their ad-supported tier for Disney Plus. Apparently, their ad-supported tier, which is slowly entering different regions since its debut two years ago, is quite popular. As much as 37% of US audiences and 30% of global are using their ad-supported tier.
The Disney exec admitted to investors that they're attempting to get people to subscribe to their AVOD plan, which has the allure of being less expensive at the cost of some of the ad-free tier's features, like downloads and SharePlay.
“It’s not just about raising pricing. It’s about moving consumers to the advertiser-supported side of the streaming platform. Right now, in the United States, about 60% of all new subs are buying our streaming services advertising-supported, or AVOD. Right now, I think it’s 37% of total subs in the U.S. are AVOD subs – 37% in the U.S. and 30% globally. So, the pricing that we recently put into place, which is increased pricing, was actually designed to move more people in the AVOD direction because we know that the ARPU [average revenue per user] – and the interest from advertisers in streaming – has grown."
After revealing the numbers, though, Iger was caught admitting that he wasn't supposed to share the AVOD numbers.
“I don’t know if I was supposed to disclose those AVOD numbers,”
It's become commonplace for streamers to have an ad-supported tier, but oftentimes, they won't disclose the percent of how many people are using the tier. In the end, it's obvious that Disney doesn't want people on its ad-free version anymore with constant price hikes, with their latest jumping its yearly price to $159.99 a year, with monthly prices going from $13.99 to $15.99.
We're sure this was a mistake made on Iger's part, causally talking to investors before realizing the damage that it could cause for their marketing department. Nonetheless, this will likely just be a small hiccup and there won't be this whole hullabaloo about it for long. The ad-supported tier is no doubt going to continue to grow both with subscribers and intested advertisers. Already, Dentsu, Havas, Horizon, IPG, Omnicom Group, Publicis, RPA, Stagwell, and WPP are all part of the program, with advertisements for anything from retail to automotives, technology, travel, telecom services, and more.
It's worth noting, though, Disney doesn't push their ad-supported tier with promotions other than Black Friday and with partnered cable companies.