How Disney is overpowering streaming giants and rivals like Netflix and Prime to emerge as a winner of the streaming wars.
Riding the wave of home entertainment are streaming platforms like Netflix, Prime, Apple+, and Disney+. In a decade-long journey of streaming platforms, Disney+ is a relatively new contender which has taken the streaming world by storm. As of 2022, Disney+ has more than 137.7 million paying subscribers on its platform.
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Beginnings of Disney+
Bob Iger, then-CEO of The Walt Disney Company, had been in charge of the company for a decade and had bet his reputation on intellectual property by 2015. His approach centered on providing the corporation with as much high-quality material as possible through a series of massive purchases that included legendary brands like Star Wars, Marvel, and Pixar.
However, things were changing fast. Much of the media sector was facing an existential threat from younger, quicker digital companies. Netflix and Amazon were encroaching on Hollywood's territory. No company, no matter how large or profitable, was safe from this new wave of change.
Due to the decline in the number of cable TV users, ESPN was losing subscribers, resulting in Disney’s stock falling by 9%. If Iger wanted to turn things around, he understood he needed to do something big. Disney required a contemporary distribution platform to make the most of its massive content library. This led to the birth of Disney+ four years later, in November 2019.
Acquiring New Content
One of the reasons that Disney+ is emerging as a streaming winner is its massive content library. This library is the result of strategic acquisitions carried out by Disney throughout the years. In March 2019, Disney completed its greatest acquisition, a $71.3 billion merger with 20th Century Fox.
The merger changed the media entertainment scene and cemented Disney's position as the market's most dominant studio. Added to that was Disney now getting Fox’s 30% stake in Hulu, another streaming service. Disney had already acquired a 30% stake in Hulu previously, enabling Disney to now have a 60% stake in Hulu.
Disney had also previously acquired Marvel Studios, Lucasfilm, Capital Cities, and channels like ABC and ESPN. It also acquired Pixar films for $7.4 billion. This added Pixar films to the Disney+ films collection. On 29th March 2020, Disney+ made its debut in India by acquiring the streaming service, Hotstar. Disney+ also acquired HBO Max and Discovery+, consolidating its position further.
Competition with others
Netflix has about 222 million total subscribers, while Disney (which also owns Hulu and ESPN) has continued to expand at a more aggressive pace. Disney ended 2021 with 179 million total subscribers across Hulu, Disney+, and ESPN+, and it plans to double the number of countries that Disney+ is available in by fiscal 2023. Disney also announced the creation of an International Content and Operations group to expand its direct-to-consumer streaming internationally. HBO Max is growing too, the company said that December had been its most-viewed month since the service’s launch in May 2020
A major threat to Disney+ is the streaming giant Netflix. Netflix boasts of 60 million subscribers in the U.S alone, while Disney+ has 10 million subscribers in the US. However, Disney+ achieved 100 million subscribers in only 16 months, something Netflix has managed to achieve over a span of 10 years.
($NFLX) Netflix's share is currently down -73.4% to $177 from its all-time high of $690 in October of 2021.
Today, Disney+ is behind 90 million subscribers from Netflix, but it is catching up. While Netflix boasts of a bigger content library (more than 6,000 titles), it is also losing subscribers due to increased subscription prices, competition from other streaming services, and a lack of new quality content.
In 2022’s first quarter, Netflix lost 2 million subscribers. Disney+, on the other hand, gained 9 million subscribers in the same quarter. With such continued growth, Disney is currently winning the streaming war.
Telecom giant AT&T announced a deal to combine its content unit WarnerMedia with Discovery, paving the way for one of Hollywood’s biggest studios to compete with media giants Netflix and Disney. AT&T said it would receive an aggregate amount of $43 billion in a combination of cash, debt, and WarnerMedia’s retention of certain debt. With this deal, CNN+ will be shut down its operations to merge with Dicovery+
Learn more about CNN+ debacle:
Key Takeaways
CNN+, which launched on March 29, will be shut down on April 30.
Warner Bros. Discovery will shut down the newly-launched streaming service CNN+ only one month after it launched, the network reported Thursday, a major blow to the cable news channel over one week after merging with Discovery.
Losses
Disney’s Other Streaming Services
While Disney+ reigns superior, Disney has other streaming services too. Starting with HBO Max, which has HBO’s entire library, along with movies from the DC Comics Universe. It also boasts of an impressive kids’ titles collection. Below is the graph of which companies are partially or wholly owned by Walt Disney Corporation.
Then comes ESPN+, a sports-centered streaming service. ESPN+ has all the action for sports fans. Disney+ also owns a major stake in the streaming service Hulu. Hulu's channel selection includes a wide range of well-known series from networks like ABC, Fox, and CBS, which you can watch immediately after they broadcast.
Future of Streaming
Streaming is here to stay for a multitude of reasons. Firstly, the factor of comfort. Second, streaming is a better option for economically challenged consumers. The necessity to carry more than one channel at a time has been eliminated thanks to the advent of a new viewing habit known as binge-watching.
While the cost of a single streaming service has risen marginally in the previous fifteen years, it still pales in contrast to the cost of a cable or satellite subscription. When it comes to streaming services, four media giants will dominate the scene. These are Warner Bros, Walt Disney, ViacomCBS, and NBCUniversal.
Netflix will fall to the fifth position if it doesn’t revamp itself. Slowly, it is possible that consumers may transition to streaming completely, given the variety and convenience that streaming offers them.
Conclusion
How Disney managed to turn the ruling tide in their favor is an impressive feat. With Disney+, Disney has taken over the streaming world too and saved itself from redundancy. Disney+ may prove to be the underdog among the likes of streaming champions like Netflix and Amazon Prime.
This has been proved when Disney+ emerged with 130 million subscribers at the end of 2021. Even though the streaming war may turn out to have multiple winners, Disney+ will definitely emerge at the top.
