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Disney + ad-supported level could generate $ 1.8 billion in the US – What happens to Disney Plus

Disney + ad-supported level could generate $ 1.8 billion in the US – What happens to Disney Plus

Later this year, Disney + will introduce an ad-supported subscription in addition to the ad-free option, starting in the US in late 2022, with plans to expand internationally in 2023.

Although no price details have yet been announced for Disney + with ads, Disney expects the ad-supported level to be the most popular level, as they have found with Hulu.

According to MoffettNathanson analyst Michael Nathanson, he predicts that Disney + could generate $ 1.8 billion in US advertising revenue by 2025.

“Netflix has the potential for much greater global ad growth, but the domestic advertising potential for Disney + appears to be greater due to a much lower initial revenue per user (RPU) compared to Netflix, a more developed advertising infrastructure, pent-up demand, affiliation with Disney- content and greater availability for revenue generation as Disney owns most of their content. “

And that prediction is only for the United States, so advertising revenue will be even more than the estimated amount. This shift to an ad-supported level means that Disney has had to change tactics:

“Over the last 90 days, both Netflix and Disney decided to revise past strategic decisions by embracing the development of an ad-supported streaming service to complement their older ad-free products. Stranger Things on Netflix and Obi-Wan Kenobi at Disney + set every viewer record, both companies are now looking to build a new advertising-supported streaming product to open up a new revenue stream, increase consumer adoption and increase total revenue and profits. “

With subscriber growth slowing globally, following a massive expansion during the pandemic, Disney is returning to one of its most important sources of revenue in advertising, Nathan explained why things have changed:

The most obvious answer is that the decline in subscriber growth and the ability to extend the reach of each service with lower price points, especially in emerging markets, have necessitated the development of an ad-supported level. In addition, if managed properly, the turning point for advertising However, due to the size of Disney’s other businesses (such as Disney Parks and Resorts and linear networks), the key to domestic advertising should be much more incrementally appealing to Netflix’s long-term (post-2025) earnings. per share than Disney. ”

The addition of ads will make Disney + more exciting for investors.

“While we’re excited about the potential of advertising with these two streaming giants, the devil will be in the details of how each company prices these new offerings and how much of the available content display will be available and suitable for advertising. In general, we feel that the growth of these advertising offerings will come mainly from non-sports and news linear cable and broadcasting networks. “

Do you want to move to the ad-supported level? Or stay at ad-free level?

See also  Disney+ Original Move “Movie” to stream on Hulu and ESPN+ for a limited time – What's happening on Disney Plus

Source – THR

Roger Palmer

Roger has been a Disney fan since he was little, and this interest has grown over the years. He has visited Disney parks around the world and has a huge collection of Disney movies and collectibles. He is the owner of What’s On Disney Plus & DisKingdom. Email: [email protected] Twitter: Facebook:

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