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Study: Ad-Supported Disney+ Off to Faster Start Than Netflix, HBO Max, Peacock

Study: Ad-Supported Disney+ Off to Faster Start Than Netflix, HBO Max, Peacock

With major subscription streaming video services feverishly rolling out ad-supported tiers to jumpstart revenue, new data from Antenna finds that three months into the launch of an ad-supported option on Disney+, the platform is off to a faster start than Netflix or HBO Max among new subscribers.

The research firm found that in the first month, 20% of new SVOD subscribers went to the Disney+ ad-supported plan, compared with 9% for Netflix’s ad-supported tier and 14% for HBO Max’s. By the third month, Disney+ reached 36% penetration among new subs, compared with 19% for Netflix and 21% for Max.

Notably, Netflix’s ad-supported plan is available only with the Netflix basic plan. The streaming pioneer’s standard and premium tiers don’t offer an ad-supported option. Indeed, 54% of all new basic plan subscribers in January opted for the ad-supported tier.

The launch of the Disney+ ad tier was packaged with a significant price increase. Existing subs had the option to pay an additional $3 monthly, pay the same price with advertising, or cancel. Antenna found that 94% of Disney+ premium plan subs took the price increase, 5% canceled, and less than 1% of existing subscribers maintained their current cost by switching to the ad-supported plan.

“Consumers are clearly demonstrating that they are willing to choose advertising in exchange for a lower price,” read the report. “In Peacock’s case, three out of four subscribers have the ad-supported plan, but across the board all services that have launched ad-tiers are seeing consumers opt-in to their less expensive AVOD plans.”

Still, the growth of ad-supported subscribers takes time, the report noted. Antenna found that HBO Max’s ad-supported plan saw incremental increases among both new and existing subs following its launch, and that it now accounts for 20% of all Max Subscribers.

“Disney+ and Netflix are also seeing similar incremental increases in the first months in market — Disney+ a bit faster than HBO Max, and Netflix a bit slower — suggesting that both Services are headed towards accumulating meaningful audiences for advertising,” read the report. “While it’s still early days for ad-supported premium SVOD, it’s interesting to see multiple services experimenting with different offerings and pricing strategies, suggesting that there may be multiple paths towards profitability for video streaming services to take.”

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