Everyone knew that Disney+ was coming, but in the last week Disney has made a number of surprising announcements regarding what is to come.
Following several of these announcements, Disney stock rose sharply while Netflix declined — but that doesn’t necessarily mean that Disney is about to consume the precursor streaming service. There are a few things that are really going to make a difference when it comes to the success of Disney+… and there’s one important caveat.
Disney+ Strikes a Price Point of $6.99
If everyone knew that Disney+ was about to be released this year, why did it have such a dramatic impact on stock prices?
The answer is price. After spending a large amount of money on original content, Netflix has been forced to raise its prices several times. While its consumer base didn’t drop out, that was also because there wasn’t a major competitor.
At a price point of $6.99, Disney+ is going to be cheaper than any other major streaming service — by a lot. With consumers already frustrated that their streaming services are now just as expensive as their cable used to be, that could pull a lot of people, especially if they’re able to maintain a diversity of content. Yet content is exactly what’s going to end up being the deciding factor for many consumers, and it’s where Disney might run into some trouble.
Disney’s Rights and Exclusive Content
Disney is leaning hard into Marvel and Star Wars, with The Mandalorian, WandaVision, Loki, and The Falcon and Winter Soldier all slated as upcoming shows. They’re also courting the younger and teen demographic with The Diary of a Female President and High School Musical. While there are likely other IPs coming to the stage, this really shows Disney’s focus: they’re banking on the popularity of shows about the Marvel and Star Wars cinematic universes.
And this is an interesting strategy. With viewers already relatively fatigued by Marvel and Star Wars movies, Disney is branching out into separate shows, each with their own expenses and budgets. Disney has money to burn, but there is some skepticism regarding whether all of these shows could possibly maintain a high quality.
Yet, they also don’t have to. Disney is focusing on teenagers and children — they may very well be producing intentionally ephemeral content to capture these core groups.
A Question of Tone and Audience
Netflix was able to capture much of its audience through its exclusives, and it’s one area in which Amazon Prime and Hulu have not yet been able to break in. Similarly, groundbreaking shows such as Game of Thrones and Westworld were instrumental in driving HBO Now subscriptions, well past the time when people were still interested in maintaining premium channels. All of this indicates that content may be king when it comes to developing a streaming service.
But Disney has always been a family-oriented company, and Disney+ is going to move forward with largely family-friendly content: there’s nothing R-Rated or Adult-Oriented on the platform. That means that it’s not necessarily a direct competitor to Netflix. Because Disney’s streaming service is so affordable and so sanitized, marketing towards children and teens isn’t a terrible idea. If Disney+ becomes a place where parents feel comfortable with their children streaming content, it’s likely to become an addition to many households with children.
Thus, Disney+ isn’t a direct competitor to Netflix; in fact, Disney is going to be streaming all of its adult-oriented content on Hulu, a platform that it owns a significant portion of. But Disney the company is directly competitive to Netflix, as between Hulu and Disney+, it’s going to be capturing a lot of the market.
An Industry Mired in Uncertainty
Who is going to win the streaming wars? The truth is, most consumers are fine paying for multiple streaming services, but they’re becoming fatigued by having to try to track them. Having to use multiple platforms and not always knowing which platform a show is on has become just as confusing as having to use a cable guide book, and, in this case, there is no universal schedule that can be checked.
When it comes to viewer fatigue, customers are likely to pare down to the few streaming services that have the shows they really want to watch. In the upcoming years, it’s possible that out of Netflix, Disney+, Hulu, and Amazon Prime, some major service is about to be pushed out of the market. But it’s not yet obvious which, even if Disney may be coming in hot.
Regards,
Ethan Warrick
Editor
Wealth Authority
