Disney+ raised its price to attract more users to its cheap ad-supported plan– Bob Iger recently said. Disney’s CEO confirmed this after his fiscal fourth quarter earnings presentation, which was completed last week.
Iger’s comments caused a lot of noise, especially in the United States. This comes as prices for Disney+ subscriptions in the country increased again in mid-October. The ad-supported plan has increased from $7.99 to $9.99 per month, while the ad-free option has jumped from $13.99 to $15.99 per month.
How assembled deadlineThe Disney leader explained that 37% of US subscribers and 30% of global subscribers chose the cheapest option with advertising. An interesting twist to the situation was that Bob Iger was caught on open mic during the conversation saying he wasn’t sure if he should go public with this information.
But what was really telling was that the executive said that the price increase was caused, at least in part, by the strategy More users are opting for ad-supported Disney+ subscription.
“This is not just about raising prices. It’s about attracting consumers to the ad-supported streaming platform sector. Right now in the United States, almost 60% of all new subscribers buy our ad-supported streaming services, or AVOD, I think right now 37% of total subscribers in the US are AVOD subscribers, and globally it’s 30%. So the prices that we recently introduced, which are higher, are actually aimed at them. moving more people towards AVODbecause we know that average revenue per user and advertiser interest in streaming have increased,” Iger said.
It’s important to note that Disney+ isn’t the only streaming platform that Disney offers in the US, as it also has ESPN+ (with ads) and Hulu (with or without ads).
Ad-supported subscriptions are big business for Disney+
Ad-supported plans are now an option very profitable for almost all streaming platforms. Although the decision to display advertising usually causes a lot of criticism from the public, it is clear that it brings very good results to companies. It’s no coincidence that Disney wants to attract more subscribers (new or existing) to the AVOD Disney+ format.
NetflixIn fact, a few days ago the company announced that its low-cost ad-supported plan was a resounding success. According to reports, 50% of new registrations comply with this subscription. While other services such as Prime Video, Max and Paramount+ also offer contract options at a cheaper level but are ad-supported. Of the most important alternatives, Apple TV+ is the only one that hasn’t gone down this route yet.
Many users criticize plans with ads from Disney+, Netflix and other companies because they believe that becoming more and more similar to traditional cable television. Although there have also been complaints filed about how they affect ad-free subscriptions.
IN SpainFor example, the price of the standard Disney+ plan hasn’t changed since the ad-supported option was introduced. However, it lost the ability to view 4K content and reduced the number of simultaneous users to two. IN USAIn turn, the cheap version with ads began to be offered at the end of 2022 in exchange for $7.99, the same price as the cheapest plan without ads, and today it is $9.99. Since then, the standard ad-free plan has increased in price three times, from $7.99 to $10.99, then to $13.99, and finally to its current price of $15.99.
Source: Hiper Textual
