As Disney gears up for its annual upfront presentation, global advertising president Rita Ferro told TheWrap there’s been a lot of scenario planning in response to the economic disruption created by President Trump’s tariff policy.
“There’s still a lot of uncertainty in terms of what actually will be the impact of tariffs across certain industries or categories,” Ferro said. “It’s very much business as usual right now while we plan for a future of uncertainty.”
One model under consideration from a retail-sector client involves splitting the impact of tariffs up into thirds among them, consumers and whoever sources their product, Ferro said. Another client said they would absorb the cost of the tariff for a specific period of time, while others are looking at their manufacturing to see how quickly they can ramp up or shift production to the U.S.
Ferro acknowledged the current upfront season would “be very different” and require more flexibility in how Disney shows up for clients. But she argued that when marketplaces get harder, advertisers ultimately want to double down on those who have proven track records of delivery along with years of experience and partnership.
“We’re in a really good place when you look at the portfolio that we bring to market that offers flexibility across linear, streaming and sports in a way that few can,” she said.
Strong demand across the board
Disney chief financial officer Hugh Johnston told analysts last week that the ad market has been “quite healthy,” with the company’s overall ad growth for 2025 expected to exceed the previous guidance of 3%. Johnston added there’s been “considerable” advertising demand from the restaurant and healthcare sectors heading into upfronts.
Total entertainment ad revenue fell 9.8% year-over-year to $1.6 billion in its second quarter of 2025, while total sports revenue grew 179% to $2.65 billion. The sports growth included a 21% increase in ESPN domestic ad revenue to $2.41 billion. Ferro emphasized that sports remains the “number one vehicle” where ad spend is being allocated and that Disney has seen “tremendous demand,” noting inventory for the NBA playoffs and finals has been “well sold” thus far.
“That’s one area I foresee will continue to have significant demand, strong pricing in the upfront and significant reservation of potential opportunities,” she said.
Ferro also feels “really good” about Disney’s position in entertainment, which has been a key driver of continued ad buyer investment across its streaming platforms. On the linear side, she added that the company is bullish about its broadcast business, which has been “surprisingly strong” and “not showing the level of decline that we have seen historically.”
Ferro attributed the lower-than-expected decline in broadcast to Disney’s focus on and continued advertiser interest in live content. She acknowledged, however, how cable continues to be challenged.
“From a content and storytelling perspective, I don’t think anyone touches us in terms of the volume and the quality of that across sports and entertainment,” Ferro said.
Competition and measurement
Ad-supported platforms across the media landscape accounted for 72.4% of TV viewing in the first quarter of 2025, compared to 27.6% for ad-free platforms, according to Nielsen data. Cable and broadcast made up roughly 28.9% and 28.7% of ad-supported viewing, respectively, while streaming accounted for the remaining 42.4%.
In January, the company reported a total of 157 million ad-supported monthly active users across Disney+, Hulu and ESPN+ globally, with 112 million in the U.S. and Canada. Disney CEO Bob Iger previously revealed in November that around 60% of new streaming subscribers are purchasing ad-supported plans, including 37% in the U.S. and 30% globally.
In addition to facing competition from Netflix, NBCUniversal, Warner Bros. Discovery and Paramount Global, Disney is also competing for a share of ad dollars with tech giants like Alphabet-owned YouTube and Amazon’s Prime Video, the latter of which flooded the ad market with inventory when it made its ad-supported viewing experience the default for subscribers in 2024.
When asked about competition in the ad-supported space, Ferro predicted there would be more consolidation in the years ahead, emphasizing it takes a lot of effort and investment to compete from both a content and technology perspective.
“We’ve made it as easy and as seamless to compete from an ad-dollars perspective in the marketplace as anybody else,” she said.
Driving engagement
As Disney continues scaling its ad-supported streaming tiers, the company invested in new technical capabilities to help drive engagement, such as creating Hulu and ESPN tiles to allow bundle subscribers to access their libraries of content directly in Disney+. The Hulu tile alone surpassed over 1 billion hours of viewing as of January.
“We think over time the ability to have access through one main front door will drive longer time spent on the platform,” she said.
Disney will also launch a fully direct-to-consumer version of ESPN this fall, which will package the network’s sports programming with fantasy sports integrations, enhanced statistics, betting features and e-commerce. The service will be included with subscriptions to ESPN linear, and Iger said the company would be “somewhat agnostic” from a subscriber perspective as it looks to balance growing the streaming business with preserving the linear multi-channel ecosystem.
Additionally, Disney launched Streams, a group of themed, live 24/7 channels. Its ABC News and kids-focused Disney+ Playtime channels have driven over 10 million streaming hours from subscribers in the U.S. and showed “early signs of overall engagement lift” amongst subscribers who watched them, the company previously revealed. The offering will continue to evolve as Disney tests out new channels to learn what resonates best with subscribers.
“News is a great example of something that we want to continue to do more of. Adult animation is another place where there’s hours and hours of library that people can come in and have a more lean-back experience that has been traditional as part of an SVOD platform,” Ferro said. “You’ll get to see more changes in that space in the next couple of months.”
