Credit: Disney/Canva, edited by ITMThe Walt Disney Company wants Disney+, its proprietary streaming service, to become a one-stop app for movies and TV, shopping experiences, and online gaming, according to Rita Ferro, Disney Advertising Sales President. Specifically, the plan is to expand the recently added ad-supported subscription tiers further to include interactive shopping elements and possible future gamification.
The Disney+ streaming service has been struggling to retain subscribers as of late and dropped a staggering 14 million subscribers in 2023 (per Statista), largely due to the loss of rights to the hugely popular Indian Premier League on Disney Hotstar. Recent financial disclosures revealed that the company has lost millions on its streaming service alone, which must make Disney CEO Bob Iger desperate to figure out a way to make it at least break even.
Rito Ferro told Variety that the company is strongly considering branching out from streaming content like Star Wars and Marvel and adding gaming and shopping “experiences” to the service; notably, it seems that a primary reason to expand is to appeal to potential advertisers. Ferro said, “The world of advertising experiences on AVOD is an important place to be involved in.”
Inside the Magic sources tell us that the company is actively working to upgrade the ad experience of Disney+ AVOD, adding interactive elements and various forms of shopping functions.
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AVOD stands for “advertising-based video on demand,” which boils down to streaming content offered to viewers for free but with ads inserted into the movie or TV show. This is the kind of model used by streaming services like Tubi or the Roku Channel, as well as the new ad-supported subscriptions to Disney+ (sometimes referred to as Disney+ AVOD).
In contrast, Disney+ was launched as SVOD or “subscription-based video on demand,” which means that for a set, usually monthly price, you can view content without ads. The most popular services in the world, like Netflix, Max, Amazon Prime Video, and Paramount+, overwhelmingly use this model.
Although Disney+ has one of the most expansive content catalogs in the world, including Star Wars, Marvel Studios, Indiana Jones, The Simpsons, National Geographic, and Disney’s own vast array of live-action and animated shows and films, it has had difficulty becoming profitable.
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Since it was launched in 2019, the monthly subscription price of Disney+ has doubled, and the company has introduced ad-based tiers, offering customers a streaming deal to view commercials. Clearly, this is where the money is at for streaming services.
The possibility of Disney+ AVOD transforming into a shopping and gaming app would not be wholly unprecedented. Prime Video, one of its biggest streaming competitors, already has Amazon shopping elements built into its platform, and gaming is likely next on the horizon. Inside the Magic sources say Disney does not plan to take Disney+ as a whole in this direction at the moment, but anything is possible in the future.
It seems probable that Disney’s vision for Disney+ AVOD would allow it to take advantage of national shopping booms like Cyber Monday and Black Friday, as well as link Disney+ to its popular proprietary games like Kingdom Hearts. We’ll just have to see if the company can figure out this next stage of monetization without alienating subscribers.
Would you use a streaming service to shop or play games? Let’s hear your thoughts in the comments below!