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Disney CEO Highlights Streaming Trends During Earnings Call
On November 14, 2024, Disney CEO Bob Iger experienced an unexpected moment during the company’s quarterly earnings call, revealing that approximately 60% of new streaming subscribers are opting for ad-supported plans. Specifically, this includes 37% within the United States and 30% globally.
As the discussion shifted towards Disney’s recent completion of its $8.5 billion merger involving Star India and Viacom18 with Reliance Industries, Iger commented, “I don’t know if I was supposed to disclose those AVOD numbers.” His remarks sparked interest among analysts and stakeholders regarding the company’s streaming strategy.
Adding context to this revelation, Disney’s Chief Financial Officer, Hugh Johnston, informed analysts that the company’s expectation for streaming growth stems from a combination of pricing strategies and increased subscriber numbers. “We’re going to read the market and we can react to it as it plays out,” he explained. “But our expectation right now is it will be both subs and pricing, a little bit more tilted towards pricing.”
Iger further elaborated on the shift towards ad-supported options, indicating that the price hike implemented in October was intended to encourage more subscribers to gravitate towards AVOD (advertising-based video on demand) plans. He emphasized that there is robust demand for such models from advertisers, as well as a growing interest among consumers.
This disclosure arrives at a time when Netflix has also made headlines with its ad-supported tier, which has reportedly amassed 70 million monthly active users within just two years of its launch. Although Netflix stated that this tier represents over 50% of new sign-ups in the 12 countries where it is offered, the company has yet to disclose the overall breakdown of ad-supported versus ad-free subscribers.
In response to the positive earnings news, Disney’s stock experienced a significant surge, climbing over 9% during Thursday’s trading session. This market reaction underscores the growing investor confidence in Disney’s evolving streaming strategy amidst a competitive landscape dominated by major players like Netflix.
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www.thewrap.com