There may be a new global leader in the “Streaming Wars.” The Walt Disney Company’s quarterly results showed a total of 221.1 million global subscribers across its streaming offerings (Disney+, Hulu, ESPN+, and Disney+ Hotstar). At the same time, Netflix reported that it ended the quarter at 220.7 million global subscribers. However, Disney’s count may double- or triple-count households that subscribe to multiple Disney streaming services – for example, those with the Disney Bundle with Disney+, Hulu, and ESPN+ count as three separate subscriptions.
Disney pulled ahead by gaining 14.4 million subscribers during the quarter while Netflix and Warner Bros. Discovery (HBO Max and Discovery+) each reported declining subscriber numbers. That said, Disney’s average revenue per user remains much lower compared to Netflix. Domestically (US and Canada), Disney’s ARPU was $6.27 per month compared to $15.95 for Netflix.
Disney is hoping to improve its ARPU with the introduction of an ad-supported tier later this year (Disney had previously revealed some details about how ads would run on Disney+). In conjunction with the introduction of the new ad tier, Disney is also increasing the subscription price for its premium ad-free tier. The new ad-supported tier will be launched on December 8th at the current price of the ad-free version, $7.99/month, while the ad-free version will see its price increase to $10.99/month. The prices for Hulu and ESPN+ are also increasing.
Disney expects many subscribers will transition to the ad-supported tier and will see an increase in its revenue per user through ad sales. Interpret’s VideoWatch® data shows that Disney streaming subscribers (those subscribing to Disney+, Hulu, or ESPN+) spend more time watching subscription streaming services. Disney+ subscribers, in particular, spend about 2.5 hours more per week watching streaming services than the average streaming subscriber. Other VideoWatch data reveals that these users are also more open to watching ad-supported subscription services than the average streaming user.
With its higher engagement levels compared to other streaming services, Disney+’s ad-supported tier has the potential to produce strong revenue numbers for the streaming service as it attempts to meet its goal of achieving profitability by 2024.
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