5 reasons why Disney’s new subscription service may signal the return of content creators to distribution dominance.
Ever since Netflix snapped up a truck load of out-of-work indie writers, directors and producers and got into the content creation game, the conventional wisdom has been that the Silicon Valley tech giants, rather than the film and television studios, would dominate both the production and distribution aspects of filmed content for years to come. The first sign that this assumption may be both premature and presumptuous came earlier this week with the Walt Disney Company’s unveiling of its streaming service known as Disney + which will drop stateside in November of this year. As The New York Time’s John Koblin and Brookes Barnes point out in their recent article, it is far from certain that Disney’s entre into streaming will prove a game changer, but here’s five reasons VENN Growth Collective thinks the mouse will give Amazon, Netflix and Apple a run for their money:
1. The Brand(s) - in study after study, Disney is routinely named as one of the most powerful brands in the world. With unrivaled name recognition and brand appeal, Disney is also easily the most beloved brand – seemingly regardless of consumer’s socio-economic or political leanings. In an increasingly polarized consumer market, Disney appears to be the one brand capable of bridging the divide between more conservative, rural and/or lower income consumers who love the company’s heritage of traditional American family values, and more progressive, urban and affluent consumers who love the company’s unparalleled customer service, its ability to deliver seamless experiences and its increasingly Liberal stance on a myriad of issues. But the Disney name isn’t the only powerful mega brand in the company’s arsenal. The streaming service will also boast the Pixar, Marvel, Fox Film Studio, National Geographic, and Lucas Films brands, as well as possible cross platform tie ins with their ABC, ESPN, and Hulu (Disney owns a 60% controlling interest) divisions. No other brand even comes close to this brand star power with the possible exception of NBC/Universal.
2. The Content & Properties – while each of the big three streaming platforms – Amazon, Hulu and Netflix - boast powerful and popular content, Disney possesses a bevy of enviable franchises that extend well beyond their namesake’s assets, including the Star Wars and Marvel franchises, the Simpsons, and Fox library film titles including Titanic, Avatar, Alien, and Sound of Music to name just a few. When coupled with an impressive investment in the development of nine episodic series, and both live action and animated features which will extend some of the brand’s most popular Disney franchises, this backlog of historic content sets Disney apart from the competition who lack any similar legacy content to speak of.
3. The (Constantly Replenishing) Consumer Base – while births in the U.S. and around the world are in decline, there are still over 131 million little consumers born every year, all in need of the child-friendly content for which Disney is renowned. Little consumers who grow into young adults who devour comic book, fantasy and science fiction themed content like the Marvel and the Star Wars franchises. While the current streaming services have certainly developed major followings, none possess content so directly targeted to a young demo who can literally grow up with the brand. The service is set to launch on everything from Amazon Fire to Apple TV. At the unveiling Disney also showed the service being delivered via Amazon’s Fire TV, on phones and tablets. Together, these agreements mean Disney will be able to reach consumers anywhere, anytime – something none of the previous streaming services had at their disposal upon launch.
4. The Business Model – Disney’s multi-pronged, cross platform business model means it can both cross promote Disney+ on the web, across the theme parks, its cruise line, retail businesses and in conjunction with a myriad of licenses at retail. Moreover the profits that these units provide means Disney+ can stand to lose money for years to come in order acquire eyeballs and without the new service from becoming a drag on its stock. While the Street holds tech giants relatively unaccountable for profitability, these are advantages that Netflix, Amazon and Hulu do not enjoy. And you can bet that Disney will take a page from Netflix’s foray into theatrical releases like the Academy Award winning film Roma, and the upcoming Martin Scorsese directed film entitled “The Irishman”, by combining streaming and limited theater releases.
5. The Cost – at just $6.99 per month and $69.00 a year Disney + will retail for 33% less than Netflix which just increased its monthly fees for a basic plan to $8.99, while Amazon Prime runs $8.25 per month (albeit with free shipping thrown in for good measure), making Disney + a comparative bargain.