Walt Disney Co, launched the Disney+ streaming service that includes advertising content. Disney+ is targeting big advertisers from various sectors as the company attempts to generate new revenue. This effort was made because Disney is pushing its streaming business to generate profitability.
As reported by Reuters on Thursday (8/12), Disney Advertising President Rita Ferro said more than 100 business brands participated in the launch of this Disney+ version of the ad. The business brand has been promoted by Disney to marketers and buyers since May 2022.
Meanwhile, the company is under pressure to make a profit from the streaming business, yes. Understandably, Disney has posted a loss of US$ 1.5 billion in the third quarter of 2022. The losses experienced by Disney have impacted investors’ concerns about the company’s shares.
In addition, the loss also resulted in the dismissal of Disney Chief Executive Bob Chapek last November. Bob Chapek was later replaced by longtime Disney head Bob Iger. Meanwhile, advertising is the second largest source of revenue for Disney+. The biggest revenue, of course, comes from user subscription fees.
Meanwhile, other company streaming services such as Hulu and ESPN+ have already loaded advertising content on their streaming platforms. Disney+ also increased the subscription price of US$3 per month which took effect on December 8, 2022. With the increase in subscription fees, the ad-free version of Disney+ costs US$ 10.99 while Disney+ with ads costs US$ 7.99.
Walt Disney Co. Launch Ad Version Streaming HBO Max, Paramount+, and Peacock
Researcher Kantar projects that one in four Disney+ subscribers will likely switch to a cheaper version of the service with ads. As streaming service subscriber growth has slowed in North America, Netflix is also introducing advertising to boost revenue and support its estimated $17 billion annual content spend.
Other streaming services, such as HBO Max, Paramount+, and Peacock, are also offering ad-supported versions of their streaming services, mimicking the business model that has long underpinned television.
Ferro told Reuters that Disney+ would show four minutes of ad time per hour, in 15 and 30 seconds. As well as limiting the number of times the same ad could appear over a day or week. Furthermore, Disney also plans to introduce a feature that will allow advertisers to target consumers based on region, gender and age.