Disney Plus is facing significant challenges as advertisers reportedly pull their campaigns from the platform. The streaming service’s original content has failed to meet the impression thresholds outlined in ad contracts, creating dissatisfaction among advertisers.

The ad-supported tier of Disney Plus was intended to solve the company’s streaming challenges. However, low audience engagement with major Star Wars and Marvel shows has led to below-average impressions. In response, Disney is reportedly trying to shift advertisers to broadcast television in an effort to retain their business and avoid costly refunds.

This issue came to light in a recent video by the Valliant Renegade YouTube channel. Valliant, joined by Kiss My Grits (KMG), an advertising professional speaking anonymously, provided insight into Disney’s struggles.

“Basically what is happening with Disney Plus is Disney Plus is struggling right now to fulfill the obligations that it’s promising to its advertisers,” KMG explained, citing conversations with industry contacts in New York City. “And what I mean by that is whenever you agree to advertise on a platform like Disney Plus, you are always guaranteed a certain amount of impressions. Well, Disney Plus is struggling to fulfill the obligations that they have been promising. So, they’re under delivering by vast amounts on several of the campaigns that are running on that platform. And and as a result of what is happening is the advertisers are obviously not very happy. And so they are pulling money from those campaigns. They’re saying, ‘all right if you’re not meeting the delivery that you promised me, I’m placing that money elsewhere.’”

KMG further explained that advertisers have lost faith in Disney Plus as a platform and are redirecting their ad dollars to cable and broadcast networks.

Disney Plus Blades — Courtesy Disney+

“The ad tier subscription numbers are nowhere near what they assumed they were going to get,” KMG said.

Valliant highlighted Disney’s immense streaming costs, emphasizing four shows—The Acolyte, Loki Season 2, Secret Invasion, and Andor—that collectively cost the company $1 billion to produce. Despite this investment, none of these shows topped streaming charts and received an average audience score of just 57.8% on Rotten Tomatoes.

“The problem was, as we pointed out, especially with Andor, which is now a year and a half ago, that, sorry, the audience simply didn’t justify the expense that was made to produce the show,” Valliant said. “Those four shows combined to cost Disney a billion dollars in production and that doesn’t include whatever Disney Plus then spent to advertise these shows.”

(L-R): Osha Aniseya (Amandla Stenberg) and the Stranger in Lucasfilm’s THE ACOLYTE, season one, exclusively on Disney+. ©.

Valliant suggested that Disney Plus’s most significant advertising opportunity might come from Bluey, a children’s show the company doesn’t own.

“That’s an issue because there’s restrictions on advertising on in content that is specific only to kids,” KMG said.

Disney is also integrating Hulu and ESPN into Disney Plus, but according to KMG, ad sales for those platforms are encountering problems as well. The audiences for Hulu and ESPN don’t align with the “pixie duster” Disney adults who make up the bulk of Disney Plus’s viewership.

Sophia Di Martino as Sylvie in Marvel Studios‘ LOKI, Season 2, exclusively on Disney+. Photo courtesy of Marvel Studios. © 2023 MARVEL.

“I knew that… there was trouble in paradise, because every single press release that was generated specifically from Disney never had a single number,” KMG said. “Not one dollar amount. And the only thing that the press really said is, ‘oh, you know we increased our advertisers by 15%.’ And I think it was very cleverly worded where it wasn’t you increased your advertising revenue, you just got more advertisers. You increased your quantity of advertisers that were coming in so, you know, very very clever language.”

“Which Disney is famous for,” Valliant added.

Bob Iger via CNBC Television YouTube

KMG then noted that Disney’s ad revenue projections continue to shrink as the company repeatedly revises its advertising goals downward.

“If you’re the advertising sales executive and you’ve promised these advertisers, like you said, so many eyeballs and you keep missing the mark, those projections get adjusted down and and down and down,” Valiant said toward the end of the video. “And then at the end of the year, you say, ‘well we met 100% of our goal. Never mind the fact the goal is now half of what it was at the beginning of the year.’”

Do you think Disney Plus will keep losing advertisers? Is advertising on Disney Plus a solid financial move? Sound off in the comments and let us know!