Ad revenue from Disney’s ad-supported online
D2C businesses, including Hulu, ESPN+ and ABC.com, increased 47% to $882 million last quarter, while ABC’s rose 5%, to $984 million.
At that pace, OTT and other online ad revenues will
soon surpass the network’s, points out Bloomberg, which cited
stats from a Disney filing.
During this week’s Morgan Stanley online conference on tech and media, Disney CEO Bob Chapek touted Hulu’s success, in particular.
“The
secret weapon with Hulu is obviously the rapidly growing, robust advertising business,” he said. “The combination of great content, being part of the Disney bundle [Disney+, Hulu, ESPN+],
and the very impressive growth in advertising is, I think, going to make that a winner for us.”
eMarketer estimates that Hulu’s ad revenue will rise about 30% this year, to reach
up to $3 billion — while Disney’s broadcast division generated $3.26 billion in advertising in fiscal 2020, notes Bloomberg.
Disney is focused on driving advertising across the
platforms by enabling self-serve, one-stop shopping of its enhanced data-enabled programmatic and first-party data offerings – with the
company forecasting that programmatic will generate up to half of the company’s addressable and linear TV revenue by 2024.
Hulu, which now has 39 million users, and charges $6 per month
for its with-advertising tier and $12 per month for the no-ads tier (outside the Disney+ bundle and other promotional offers) will of course also contribute revenue from that D2C source.
During a Q&A, Chapek also commented on why Disney has significantly increased its growth guidance for ESPN+.
Calling the sports streaming service “absolutely critical to us going
forward,” he said Disney will be pushing for mass-market penetration — “even broader appeal” to sports fans in the U.S. and globally.
“Our guidance of 20 million
to 30 million households is, once again, a function of the uptake of the incredibly successful [Disney+] streaming bundle,” he said. He noted that the guidance was based strictly on a status
quo, current trends basis, without taking into account “any transformative changes, either on the upside or downside—so we’re really pleased.”
Disney is “steering
as many rights as possible toward ESPN+,” Chapek added. “In fact, we won't contemplate rights deals going forward that don't envision ESPN+ being a major player in the use of those
rights.” The company will require that flexibility for ESPN+ because “as the consumer flexes once again, we want to be able to flex with him,” he said.