Ferro also said that frequency caps will be strictly managed: “We will launch with one brand per hour, twice per day, 12 times per week,” said Ferro. “And that is half of what we do today on Hulu in terms of frequency capping to ensure that user experience is obviously front and center to everything we're doing for Disney+.” She added that the cap is applied to individual brand campaigns rather than by advertiser to allow more leeway in a company’s broader creative messaging.
“Disney’s cross-platform empire blurs the lines between streaming and linear, giving them a lot of ways to take advantage of a Disney+ hit like ‘Andor,’ which aired two full episodes across Disney-owned ABC, Freeform, FX, and Hulu recently,” said Kevin Krim, president and CEO of EDO, in an email. “To get those subscribers to stick around, though, Disney’s ad experience has to be seamless for both consumers and advertisers. Most TV viewers are actually OK being served ads in exchange for lower subscription costs, but they still demand entertaining, engaging premium content and quality ads delivered with great technology.”
Subscriber retention is critical for Disney+ moving forward as it pushes the platform toward profitability (direct-to-consumer products, including Disney+, were the source of nearly $1.5 billion in losses on the company’s most recent earnings report). While Ferro said the ad tier is a response to greater desires for “consumer choice and control,” it will also provide a needed flow of revenue for the streamer.
Ferro said Disney will showcase all of the advertisers streaming on Disney+ today on the company’s owned billboards in New York City’s Times Square, along with “a thank you message…for being on this journey with us as a monumental moment for us as a company.”