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In a rare misstep, Disney CEO Bob Iger unintentionally disclosed key figures about Disney Plus’ ad-supported tier during the company’s Q4 2024 earnings call on November 14. The slip provided an unexpected look into the growing popularity of the streaming platform’s most affordable subscription option.
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The Numbers Behind the Ads
Responding to a question from a Wall Street Journal analyst regarding Disney Plus’ growth trajectory, Iger revealed that 37% of U.S. Disney Plus users are subscribed to the ad-supported tier, while globally, that figure stands at 30%. Although Iger didn’t share specific subscriber numbers, the data from Disney’s quarterly report made it easy to calculate.
Disney Plus currently has 56 million U.S. subscribers, which means approximately 20.7 million are on the ad-supported tier. Worldwide, with a total subscriber base of 122.7 million, about 36.8 million people are using the cheaper, ad-based plan.
While these numbers are impressive, they lag behind Disney Plus’ main competitor, Netflix. The streaming giant recently revealed that 70 million of its 282.7 million global subscribers are on its ad-supported tier—nearly double Disney Plus’ ad-supported user count. However, as a percentage, Disney Plus’ ad-supported users make up 30% of its total base, surpassing Netflix’s 25%.
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Iger’s Hot-Mic Moment
Iger’s admission wasn’t planned. Later in the call, during an unguarded hot-mic moment, Iger was overheard saying: “I don’t know if I was supposed to disclose those AVOD [advertising-based video on demand] numbers.”
His rare slip-up offered a glimpse into the performance of Disney Plus’ most budget-friendly tier, a detail typically withheld from the public.
A Strong Quarter for Disney
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Despite Iger’s accidental reveal, Disney’s Q4 earnings reflected a positive trajectory. Disney Plus added 4.4 million global subscribers during the quarter, while Hulu gained an additional 900,000 users. On the theatrical front, Disney scored major wins with box office juggernauts Deadpool and Wolverine and Inside Out 2, each earning over $1 billion globally. Both films are now streaming on Disney Plus, further bolstering its content library.
Challenges on the Horizon
The strong subscriber growth comes amid Disney’s recent price hikes across all streaming platforms, including Disney Plus, Hulu, and ESPN Plus. These increases, which took effect in mid-October, have made it more expensive for users to access Disney’s vast array of content.
Compounding this is Disney’s aggressive crackdown on password sharing, a move similar to Netflix’s. The introduction of a password-sharing fee means users now face additional costs to allow non-household members access to their accounts.
These changes are part of a broader effort to boost profitability in a competitive streaming landscape. As such, the ad-supported tier has become an increasingly critical component of Disney’s streaming strategy, appealing to cost-conscious subscribers put off by rising fees.
Ad-Supported Tiers: A Growing Trend
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Disney’s numbers suggest that ad-supported tiers are gaining traction among streaming platforms. While Netflix has a larger ad-supported user base in absolute numbers, Disney’s higher percentage of users on its cheapest plan highlights a significant trend: consumers are gravitating toward more affordable options.
This strategy could help Disney compete in a market where high subscription fees are becoming a deterrent for many viewers.
What’s Next for Disney Plus?
Iger’s unintentional reveal may not have been planned, but it provided a rare and valuable insight into the growing importance of ad-supported streaming for Disney’s future. With streaming subscription costs rising and password-sharing fees taking effect, ad-supported plans might play a key role in retaining and growing Disney Plus’ subscriber base.
The next big test will come early next year when Disney releases its Q1 2025 earnings report. If the current trajectory holds, the ad-supported tier could become an even more significant part of Disney Plus’ success story.
Should Bob Iger have released this news?
