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DTVE Data Weekly: Disney+ expands ad tier to Canada and Europe
By
Source: Omdia
Disney has confirmed a series of new service updates after reporting a total loss of 11.7m subscriptions in 3Q23, primarily due to Indian Premier League cricket leaving the Indian Disney+ Hotstar service. Not counting India, Disney gained 1.1m new subscriptions globally but lost 300,000 in North America.
The first change sees the cost of Disney subscriptions in the US increase in October 2023. The ad-free version of Disney+ increases from $10.99/month to $13.99/ month. Ad-free Hulu will increase from $14.99/month to $17.99/month, and the ad-free bundle of Disney+, Hulu, and ESPN will increase from $19.99/month to $24.99/ month.
Additionally, the Disney+ hybrid SVOD/AVOD service—until now only available in the US—will launch in Canada, the UK, France, Germany, Switzerland, Italy, Spain, Norway, Sweden, and Denmark. Disney will also move ahead with measures to tackle password sharing, following trials in India on limiting the number of devices allowed to access subscriptions.
Four years after the launch of Disney+, Disney’s aggressive move toward direct-to-consumer (D2C) streaming has paid off. In most markets, the flagship Disney+ service has become one of the top SVOD services, alongside Netflix and Amazon.
However, as streaming matures, the market is faced with multiple new challenges, notably managing churn and ensuring profitability. Ad tiers can play a part in both: a cheaper price can offset churn, while ad revenue can bolster revenue. Disney’s international advertising push will compete with main rival Netflix, which has launched an ad tier in 12 select markets. However, Disney’s move could spark a new series of Netflix ad tier expansions. Having two of the largest global SVOD services available with ads should further reinforce the concept of hybrid SVOD/AVOD for customers, particularly in Western Europe, where the model is still relatively new and far from fully exploited.
Tony Gunnarsson, is Omdia’s Principal Analyst, TV, Video & Advertising