For the second consecutive quarter, Disney’s streaming business has shown profitability, with earnings from Disney Plus, Hulu, and ESPN Plus reaching $321 million in Q4 2024, a substantial increase from $47 million in the previous quarter.
In a Thursday earnings call, Disney CEO Bob Iger revealed that approximately 60% of new subscribers are opting for Disney Plus’s ad-supported plan. Currently, 37% of total U.S. subscribers are using this option, which has become a significant revenue source for the streaming sector.
“It’s not just about raising pricing,” Iger explained. “It’s about moving consumers to the advertiser-supported side of the streaming platform. The recent price increase we implemented was actually designed to shift more users toward the AVOD (Advertising-based Video on Demand) model.” Disney raised prices across its streaming services in October, a move aimed at boosting revenue from ads as well as subscriptions.
Disney’s success comes at a time when more streaming platforms are achieving profitability. Netflix was once the only streaming service capable of consistently generating profits, but competitors are now catching up. Paramount Plus, for example, has recently turned a profit for the second straight quarter, while Warner Bros. Discovery’s Max platform continues to generate positive earnings as well.
In addition to profitability, Disney’s streaming services experienced modest subscriber growth in the U.S. and Canada, rising from 54.8 million last quarter to 56 million. This growth, however, is being tempered by efforts to limit password sharing. During the earnings call, Iger confirmed that paid password sharing had begun in Latin America earlier this week. Disney’s CFO, Hugh Johnston, also mentioned that price hikes may be considered in the future.
“We certainly plan to continue increasing pricing in line with the value we’re providing to consumers,” Johnston said. “Much of the growth we’re seeing is driven by the exceptional content coming from our movie and TV studios, which is proprietary to us, and that will undoubtedly support future price increases.”
Disney also announced plans to integrate an ESPN Plus tile into Disney Plus starting December 4th, allowing U.S. subscribers to access select live sports events and studio programming. Earlier this year, the company brought Hulu content into the Disney Plus app, further expanding the range of content available to subscribers.
The combination of a strategic push towards ad-supported options, growth in content offerings, and an increase in pricing indicates Disney’s continued effort to leverage its streaming platforms as significant revenue-generating assets. By moving more users to the ad-supported tier, Disney aims to capture both subscription fees and advertising dollars, creating a more sustainable revenue model for the future. The integration of sports programming into Disney Plus further enhances the platform’s appeal, bringing live events to subscribers and broadening its reach in the competitive streaming landscape.
Looking ahead, Disney’s focus remains on creating value through high-quality, exclusive content, which Iger believes will allow the company to adjust prices over time. As more streaming services hit profitability, Disney’s approach to monetizing its platforms, combined with its content strategy, will likely continue to be a key factor in its success. The shift toward ad-supported plans also reflects broader trends within the streaming industry, where companies are diversifying their revenue streams to build sustainable growth in an increasingly competitive market.