Disney CEO Bob Iger had a “hot mic” moment on the company’s fiscal fourth quarter earnings call Thursday morning, questioning aloud whether he should have revealed key streaming numbers.
Fielding a question from a Wall Street analyst about the growth outlook and pricing strategy of Disney+, Iger divulged how many Disney+ subscribers take the ad-supported tier in the U.S. (37%) and globally (30%). The disclosure was unusual in the streaming sector. Netflix, for instance, has never broken out a similar percentage, preferring instead to report monthly active users of its ad tier (as it did earlier this week).
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When the Q&A with analysts moved to the next question and CFO Hugh Johnston was giving his answer, Iger’s voice suddenly could be heard on the call. “I don’t know if I was supposed to disclose those AVOD numbers,” he said, before Johnston continued speaking.
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Disney’s quarterly numbers were strong, powered by a major comeback at the film studio and the addition of 4.4 million subscribers to Disney+. The flagship streamer, whose core subscriber numbers topped 120 million, debuted its ad tier in December 2022, joining a push into advertising by major streaming outlets. Iger has frequently touched on the company’s strategic goal of guiding more subscribers over time to the ad tier, only this time he did so with supporting stats.
“It’s not just about raising pricing,” he said. “It’s about moving consumers to the advertiser-supported side of the streaming platform. Right now, in the United States, about 60% of all new subs are buying our streaming services advertising-supported, or AVOD. Right now, I think it’s 37% of total subs in the U.S. are AVOD subs – 37% in the U.S. and 30% globally. So, the pricing that we recently put into place, which is increased pricing, was actually designed to move more people in the AVOD direction because we know that the ARPU [average revenue per user] – and the interest from advertisers in streaming – has grown.”
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Responding to the same analyst question, CFO Hugh Johnston said the revenue outlook in streaming is derived from “both subs and pricing,” but is “a little bit more tilted toward pricing.”
Disney announced a set of price increases last August. They took effect in October.