While it was previously reported that Disney+ will bar marketing for preschool-aged users, Ferro confirmed that advertising will still be allowed for other children, compliant with the Children's Online Privacy Protection Act and subject to on-platform parental controls. Disney said it will not collect data for advertisers from its children users. But the family-friendly platform still has a significant portion of adult viewers, which Ferro called “AWOKs,” or “adults without kids,” to appeal to broader markets.
Ferro said Disney is taking the ad tier’s launch slow so that “when we're ready to go, it's going to be the experience that everyone expects from Disney, given that it is our namesake on the platform. But also some of our most historic content is on that platform.”
While some streamers, such as Peacock, have launched their ad-supported tiers with a small test group of advertisers, Disney+ will not follow suit. Ferro said they want to begin Disney+’s ad tier with a broad range of advertisers to avoid viewer fatigue, a lesson the company learned from recurring ads on Hulu.
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Disney+’s ad-supported tier is expected to launch in the fourth quarter of 2022 and will be priced at a premium more than Hulu.
Ferro said Hulu remains “our general, entertainment-first, big, bold storytelling platform on serialized content,” which will complement the more niche programming on the Disney+ platform. Hulu remains the company’s guiding star in addressable advertising. Despite the sentiment that streaming is the sole source of income for networks, Ferro said around 40 to 45% of its upfront has gone to addressable advertising, consistent with last year and offset by strong numbers in its linear sports programming.
“Demand across linear continues to be strong,” Ferro said. “There are brands who really, that is foundationally important in their marketing mix, to make sure that they're investing and launching brands. There's no better way to launch a brand than broadcast television, and so, we continue to see tremendous demand in that space.”