At a recent industry event, Bob Chapek, CEO of Walt Disney, ruminated on what advertising means to its streaming services, in terms streamers subscribers and marketers’ value.
Generally, this could include country-specific restrictions/limitations, as well as identifying possible content issues around one key audience group on Disney+: Kids.
Chapek: “Disney+ has a lot of kids that watch it, and... for us to consider advertising on something like Disney+ would be completely different than it might be on Hulu.”
Some of this stems back to Disney Channel’s longtime stance of avoiding traditional advertising. That said, the network does make limited sponsorship agreements with marketers.
It’s not as if Walt Disney avoids advertising on new D2C services. There’s Hulu, a more adult-driven service, one-third of the Disney Bundle, along with Disney+ and ESPN+. It has had a major advertising option for consumers to consider.
“We are very pleased with what we are seeing with addressable advertising on Hulu,” says Chapek. Estimated ad revenue of Hulu per year is around $2 billion, according to analysts.
But he added that all this “doesn’t say that in the future, we might not look at different opportunities for an increased level of addressable advertising across our platforms.”
Currently, Disney is doing its part to address the needs of traditional TV marketers looking for extended video reach in the streaming world to complement its traditional TV network business -- with Hulu and ESPN+, which also takes advertising.
Perhaps this comes down to competitive marketplace positioning.
Disney+, as a separate entity to its other businesses, wants to grow the business. That means looking to lure possible Netflix subscribers, the industry leader at the moment.
How? By offering a style of premium streaming service consumers want: no advertising.