London: The ad-supported version of the Disney+ streaming service, which Walt Disney Co. launched in December, is proving more popular with new subscribers than similar options offered by Netflix and Warner Bros Discovery’s HBO Max, according to a market researcher.
In its first month of release, the Disney+ ad-supported plan generated 20 per cent of the service’s new signups, compared with 9 per cent for Netflix in its first month and 14 per cent for HBO Max, according to data published Friday by the industry tracker Antenna. By February, 36 per cent of new subscriptions to Disney+ were for the ad-supported version, compared with 19 per cent for Netflix and 21 pert cent for HBO Max.
The growth of the Disney+ ad-tier is crucial to CEO Bob Iger’s ambition to turn a profit in the company’s streaming business. The ad-supported plan debuted at $8 a month, the same price the company was charging for its ad-free version, which Disney raised to $11. Despite the price increase, 94 per cent of Disney+ subscribers switched to the ad-free service, while 5 per cent canceled and fewer than 1 per cent traded down to the ad-supported plan, Antenna said.
Investors are focused more on the profitability of online platforms after years of favoring subscriber growth. Earlier this month, Iger described the streaming industry as “very, very tricky” at the moment. Disney won’t make any decisions on selling its majority ownership in Hulu or acquiring Comcast Corp.’s stake in that business before gaining a better understanding of that platform’s potential for growth and profitability, he said.
Comcast Corp.’s Peacock, which launched with an ad-supported version, and Hulu, which has offered commercials for years, had the highest overall share of subscribers coming from ad-supported plans, suggesting their popularity should grow over time.
Netflix, the industry leader, reported 74.3 million subscribers in the US and Canada at the end of last year. Disney+ had 46.6 million.
