It turns out that a global pandemic is a great time to get into the video streaming business.
Having launched just over a year ago, Disney's streaming service - Disney+ - had gained 95 million subscribers by the start of 2021. By comparison, it took Netflix the guts of a decade to grow its user base to that level.
Of course viewers today are far more open to the concept of video streaming services than they were in 2007… and when you're trying to lure subscribers it doesn't hurt to have the marketing might (and deep back catalogue) of Disney at your disposal.
However there is no doubt that the timing of its arrival helped Disney+ too, as the restrictions and lockdowns introduced around the world led millions of households scramble for any entertainment and distraction they could find from their couches.
In a recent ComReg survey, 61% of broadband users here said they were watching more TV streaming services than they had been pre-pandemic.
A separate report by marketing communications firm Core estimates that almost a quarter of Irish adults had accessed Disney+ in 2020 (by comparison, Netflix was accessed by around 72% of adults here last year).
But after having a dream opening, the streaming platform now faces into a tricky second act.
Into the unknown
One of the ways Disney+ boosted initial subscriber numbers in Ireland - and elsewhere - was through a discounted pre-order rate for annual subscriptions. With the service about to hit its first birthday on these shores, those users are now getting emails to tell them the term is almost up.
At the same time, new subscribers are facing a significantly higher entry price - with the monthly fee jumping by almost 29% to €8.99.
That effectively means that millions of subscribers will soon be deciding whether it’s worth sticking with Disney, while potential newcomers will be weighing up a heavier hit to their back pockets to get on board.
To soften the blow somewhat, Disney has deferred the price rise for existing subscribers until August. The side-effect of that is that those paying annually could delay the higher charge until well into next year.
Meanwhile the company has added a swathe of extra titles to the platform - enough, it claims, to double the amount of content available. To achieve this it has essentially added much of the archive it acquired through its $71.3 billion takeover of Fox in early 2019.
But while fattening up the back catalogue will do no harm, its Disney’s about-turn on its streaming strategy that will really drive its future potential.
A whole new world
When looking back at the initial launch of Disney+, it is reasonable to argue that the company saw it as little more than a modern equivalent of its home video business.
That is to say that it would serve as the final resting place for a show or film that had run its course on its primary platform of linear TV or the cinema.
That approach can be implied from the extremely limited amount of original content produced for the platform in its first year, with only its Star Wars space western The Mandalorian managing to move the needle in terms of viewer hype.
Instead, Disney leaned heavily on its (admittedly vast) catalogue of classic cartoons and blockbusters when trying to sell subscriptions. It also positioned itself as a family friendly service - arguably alienating a lot of potential users in the process.
But whether it was the better-than expected growth of the service, the pandemic, or both, Disney has changed its tune significantly in recent months.
In October Disney announced a seemingly technical reorganisation of its business, separating content-making from distribution.
This was actually a hugely important shift, however, as it saw streaming going from being the after-thought of cinema and film to being at the top table when Disney was finding a home for new productions.
Then in December, Disney set out an ambitious plan to ramp up the amount of programming it was bringing to the streaming service - which would see it spending $8-9 billion on content by 2024.
It has already announced details of around 50 series and films that would debut on Disney+ in the coming years, which has seen it tap into the Star Wars and Marvel universes it owns, while also leveraging other fan-favourites like Aliens and Willow.
And most recently the addition of the Fox/Star content has not only expanded its catalogue, but also brought more adult-orientated programming to the service for the first time.
And with more of that Fox content, currently leased out to other platforms, set to slowly trickle back to 'Star’ it’s until now threadbare ‘coming soon’ slate should soon start to look a little healthier.
I just can’t wait to be king…
And it would want to if Disney is to meet its goal of having up to 260 million subscribers by the end of 2024. It will also need all the help it can get if it is to remain a real challenger to Netflix - or perhaps even become the leader in the market.
After all, while Disney has grown an impressive head of steam in the past year, it doesn’t seem to have been at the expense of Netflix.
In fact - despite being the incumbent with a 13 year head start, and lots of new competitors looking to muscle in on its territory -2020 was still Netflix’s best year of paid-subscriber growth ever.
Over the 12 months it grew its userbase by almost 36.6 million - or 22% - in 2020, blitzing past the 200 million mark in the process. And it continued its firm grip on the binge-watching zeitgeist - with the likes of Tiger King, The Queen’s Gambit and Bridgerton among the most-watched and most talked about programmes in the world last year.
Netflix is now earning so much from its users that it even says it will soon no longer have to borrow money in order to pay for the shows, documentaries and films it is constantly adding to its service.
And that’s not to mention Amazon’s Prime Video, which is estimated to have had 150-160 million subscribers by the end of last year.
Its own growing slate of titles - and live sporting events - mixed with Amazon’s deep pockets, means it too will remain a serious competitor in the hunt for streaming supremacy.
So despite everything going right for it in year one, Disney remains an underdog with a lot of work to do - not something you can often say about a $350 billion colossus.The fact that it has already retooled Disney+ - and the company itself - shows that it still has a lot to learn about the streaming sphere.
But the fact that it was willing to do so shows just how serious it is about taking the Netflix’s crown.
