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Netflix and Disney+ probably only added ad-tier subscribers this year, says Morgan Stanley

As streaming prices climb, ad-free subscribers are becoming a rarity.

12/18/25 1:02PM

A mass digital migration is taking place, with streaming subscribers leaving their original ad-free tiers as prices climb.

Those subscribers appear to be leaving for greener, louder, more sponsored pastures.

US streaming costs have grown 12% this year, the fourth straight year of double-digit hikes for the top 10 services, according to Convergence Research Group. The hikes appear to be having their intended effect: subscribers are leaving their pricey commercial-free plans behind and switching over to lower-cost, ad-backed subscriptions.

That works out for streamers like Netflix and Disney, since those plans bring the companies more revenue per user despite their lower cost.

The subscriber switchover trend appears to be growing, too. In a note on the entertainment year ahead published on Thursday, Morgan Stanley estimated that cheaper ad-supported streaming subscriptions now make up 30% of Netflix’s subscribers and half of Disney+ subscribers. That’s up from last year’s numbers: 20% for Netflix and 39% for Disney.

The firm also dropped a fascinating tidbit: it believes that ad tiers scored all net additional subscribers for both Netflix and Disney+ this year. The number of subscribers paying for the luxury of no commercials declined. Morgan Stanley wrote:

“Advertising supported streaming has been the primary area of subscriber growth in the past few years, as streamers looked to expand their user base and tap into a more price sensitive customer base. In fact, for both Netflix and Disney Plus, we think it is likely that over 100% of the US net additions in 2025 were through ad-supported tiers, while ad-free subscribers declined.”

This trend could become even more pronounced as streamers’ monetization improves. Morgan Stanley says the revenue streaming services bring in from ads has generally lagged expectations due to surges in inventory as more streamers build out their advertising tiers. As ad tiers become the new normal, that supply-demand calculation will likely even out in their favor.

Max Knoblauch6h

Used car prices dip in April but remain at 2023 levels as gas prices surge

Used car prices ticked down in April, the first drop in 2026, according to fresh data from Cox Automotive.

Cox’s Manheim Used Vehicle Value Index, which tracks wholesale prices, dipped 1.6% in April from March, but remains around highs not seen since 2023 as shoppers react to surging gas prices.

“Affordability remains front and center, and that’s driving some increased demand for older vehicles... as well as changing the calculus for consumers shopping for EVs,” said Cox’s chief economist, Jeremy Robb.

As reported in March, used car retailers including CarMax have told Sherwood News that gas prices are driving more shoppers to look toward EVs. Cox’s EV index is up 7.2% from April 2025, compared to a 1.1% hike for its non-EV index.

Tom Jones

gear shift

5/6/26

Harley-Davidson hopes getting “Back to the Bricks” will help turn its motorcycle business around

Its ~$1 billion financial services segment has helped keep the company ticking over in the meantime.

Harley-Davidson motorcycles cruising along scenic road during European Bike Week, showcasing vibrant atmosphere and camaraderie among riders

Max Knoblauch5/5/26

Xbox CEO overhauls leadership team with Microsoft AI execs amid sales declines

Microsoft is continuing to shake up Xbox, with gaming chief Asha Sharma (who took over the division suddenly in February) announcing an executive overhaul.

According to an internal memo seen by CNBC, Sharma is bringing four leaders from her former CoreAI group into the Xbox fold, as they have “consumer and technical expertise [Xbox does] not yet have.”

“Right now, it is too hard to ship impact quickly. We spend too much time inward instead of with the community, and we lack the depth we need in some of the fundamentals,” Sharma said in the memo.

Aside from the CoreAI team, David Schloss, a former Instacart growth exec, will take over the subscription and cloud business.

Following Microsoft’s earnings report last week, in which Xbox console sales fell 33% from last year, Sharma said the division had work to do. The company forecast more sales declines for Game Pass and consoles in the current quarter.

Microsoft Xbox CEO overhauls leadership amid sinking sales: 'We need to evolve how we work'

Aside from the CoreAI team, David Schloss, a former Instacart growth exec, will take over the subscription and cloud business.

Max Knoblauch5/4/26

Ford’s April EV sales climb from March but make up less than 2% of its total sales this year

Ford sold 22% more EVs in April than in March, but the category makes up just 1.7% of the automaker’s total 2026 sales through April. At the same point last year, EVs were about 4% of sales.

The company released its April sales figures Monday morning, with EVs climbing sequentially but still down nearly 25% from last year. Its more popular hybrids were down 5% from March and about 33% from last year.

Overall, Ford posted a 14.4% drop in sales in April from last year. SUVs were down more than 16%, trucks fell more than 14%, and cars (the company doesn’t sell many) climbed 18%.

When it reported its Q1 earnings last week, Ford boosted its full-year guidance for adjusted earnings before interest and taxes to between $8.5 billion and $10.5 billion.

Rani Molla5/4/26

Amazon opens up its supply chain to everyone

Today Amazon unveiled Supply Chain Services, a new business that turns the vast warehousing and logistics network behind its e-commerce empire into a product for other companies — an AWS-style move applied to the physical world.

As Amazon put it: “Any business can now move, store, and deliver everything from raw materials to finished products using the same supply chain that supports Amazon and its independent selling partners.”

That could make Amazon a behind-the-scenes operator for an even wider swath of commerce, expanding its reach beyond its marketplace and helping it capture more of the $1.3 trillion third-party logistics market.

Shares of traditional shipping companies UPS and FedEx fell after the announcement.

Amazon listed Procter & Gamble, 3M, and American Eagle among the logistics service’s first customers.

Introducing Amazon Supply Chain Services: Amazon’s logistics network, now open to every business