Bob Iger’s Unintentional Truth About Disney+ Pricing and Subscriptions

Bob Iger’s Unintentional Truth About Disney+ Pricing and Subscriptions

During the latest earnings call, Disney CEO Bob Iger inadvertently disclosed important data regarding Disney+ subscribers using the ad-supported tier.

Realizing his misstep, he remarked soon after that, “I don’t know if I was supposed to reveal those AVOD [Ad-based Video On Demand] figures.”

Deadline has the details.

When asked by a Wall Street analyst about Disney+’s growth potential and pricing strategy, Iger shared that 37% of Disney+ subscribers in the U.S. and 30% globally are using the ad-supported option. This kind of disclosure is rare in the streaming industry, as companies like Netflix have never released similar statistics.

As the analyst Q&A continued, Iger interjected, saying, “I don’t know if I was supposed to disclose those AVOD numbers,” just before CFO Hugh Johnston resumed his comments.

Iger also spoke openly about Disney’s pricing strategy, noting the significant price increases for Disney+ since its launch.

In December of the previous year, Disney raised the price of the standard Disney+ package from $7.99 to $11.99, while introducing a new $7.99 tier called Disney+ Basic, which includes ads.

Following that, the price rose again to $13.99 and then to $15.99 per month as of last month, marking a doubling in price since the service’s inception.

Iger explained that the significant increases for the standard tier were partly meant to encourage users to switch to ad-supported subscriptions, which have proven to be more profitable for the company.

“It’s not just about raising pricing,” he stated. “It’s about shifting consumers towards the advertiser-supported side of the streaming service […] The recently implemented pricing, which has increased, was intentionally designed to steer more consumers toward AVOD, as we understand the ARPU [average revenue per user] and advertisers’ interest in streaming has grown.”

Apple TV+ does not currently provide an ad-supported tier, but it has also seen similar price increases, now priced at $9.99 per month.

Photo by Thibault Penin on Unsplash

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