Disney Reports 157 Million Users Viewing Ad-Supported Content

Disney revealed on Wednesday that approximately 157 million people globally are monthly active viewers of its ad-supported content on services like Disney+, Hulu, and ESPN+.

Of these users, 112 million are situated domestically, with this average calculated over the past six months.

Challenges in Estimating Viewing Metrics

Unlike traditional television, which has standardized measurement techniques for audience metrics, the streaming industry lacks a universal standard for gauging the size of audiences exposed to ads worldwide.

Disney has taken the initiative, through its Advertising division, to establish a consistent global method to approximate the number of viewers engaging with ad-supported content.

The company has chosen the CES tech conference in Las Vegas, a significant gathering for those in media and advertising, to share insights into this methodology.

Innovating Transparency in Audience Metrics

Rita Ferro, head of global advertising at Disney, highlighted the company's unique position in taping both sports and entertainment audiences at scale internationally during ad-supported streaming.

Disney aspires to enhance transparency by clearly defining how it estimates the global monthly active users that engage with their service.

This audience valuation stems from tracking accounts across Disney's trio of services that actively view content for over ten seconds with ads.

After identifying each active account, it’s multiplied by the presumed user count per account to reach a global estimate; if an individual subscribes to multiple services, they may be counted more than once.

Rise of Ad-Supported Streaming Tiers

Media companies, including Disney, are increasingly targeting profitability from streaming, with advertising forming a crucial element.

Initially, many streaming platforms functioned on subscription models without ads, but the trend is shifting toward affordable, ad-based alternatives.

Disney's CEO, Bob Iger, seeks to pivot consumers toward these ad-supported options, particularly through price hikes on ad-free services.

Adaptation and User Preferences

Hulu, part of Disney’s offerings, led the way in providing an ad-supported alternative, followed more recently by Disney+ adopting a similar model.

In November, Disney documented 122.7 million subscribers to Disney+ Core, with additional numbers for Hulu and ESPN+.

Although Disney has not distinctly reported how many choose ad-supported payment plans, more than half of the new U.S. subscribers to Disney+ prefer these economical tiers, indicating a positive outlook.

With the shift towards ad-based subscriptions, the average revenue per U.S. user saw a slight decline, reflecting a change in the consumer base.

Disney executives remain optimistic that streaming will ultimately present substantial growth areas for the company.

Financial Performance and Projections

In the last reported quarter, covering September, Disney's combined streaming ventures turned around a profit, contrasting with the losses in the previous year.

The company anticipates revealing its fiscal first-quarter earnings on February 5, preceding market opening.