Disney Plus predicts a grim outlook for Ad-free Tv, despite the company’s subscriber base continues to decline.
Disney Plus experienced stagnant subscriber growth six months after increasing the price of their ad-free streaming service from $8 to $11 per month, along with the introduction of an ad-supported tier at the original price. The company lost 300,000 streaming subscribers in the U.S. and Canada during Q1 2023, having only gained 200,000 subscribers the previous quarter.
Despite a stagnant subscriber base, Disney+ is not planning to reconsider its price-hike strategy. In fact, the company is moving closer to achieving profitability, with CEO Bob Iger hinting at another price increase on the ad-free tier in the near future.
It has become clear that viewers who watch ads are more beneficial for streaming services than those who don’t, leading to ad-free TV becoming more of a luxury. This trend has been observed not just with Disney+, but also with Hulu, which is mostly owned by Disney. Hulu was the first to realize that it can generate more revenue from ad-supported subscribers than ad-free ones.
In 2019, The New York Times reported that Hulu earned $15 per subscriber on its ad-supported plan, which cost $6 per month at the time, while its ad-free service was priced at $12 per month. The price gap has only increased since then, with Hulu’s ad-supported plan now priced at $8 per month and the ad-free version at $15 per month.
We initially arrived at this point as a result of the widespread use of ad-supported streaming. The only way out is to vote with your cash.
