Disney+ has topped 100 million subscribers, Walt Disney Corp DIS +0.3%. CEO Bob Chapek crowed at Tuesday’s annual shareholder meeting.
That’s impressive stuff indeed for a subscription video service 16 months after it launched, especially when compared to the far smaller numbers several competitors have been proclaiming lately (33 million for Comcast’s CMCSA +3% Peacock; 29 million for all of ViacomCBS’ streamers, 39 million for AT&T’s T +1.2% HBO Max and HBO).
But now comes the process of attracting and keeping the next 100 million subscribers, which would put Disney+ and sibling services Hulu and ESPN+ collectively just behind the 203 million subscribers that global leader Netflix claims already.
And unlike the first century mark, the second century likely will be considerably more complicated. To get there, Disney will have to answer three big questions:
1. How does it remain authentic to the highly defined Disney brand while creating content that can attract a broader audience?
Disney+, unlike virtually all the rest of its parent company’s holdings, was a major beneficiary of the pandemic, scooping up millions of stuck-at-home subscribers desperate for family-safe entertainment. Emmy-winning launch title The Mandalorian and the more recent Wandavision became crossover cultural and critical hits. The service also was unexpectedly boosted when Disney shifted the animated Soul and the movie version of Hamilton away from a strangled theatrical release. But lots of other subject matter and content sources don’t fit into the highly profitable straitjacket known as “a Disney show.” And there are lots of consumers out there who would rather watch those kinds of shows than spend money to be part of the Disney superhero/princess programming axis.
2. What happens to Hulu?
FX’s fabulously edgy content dresses up an otherwise rather shapeless et cetera service. Hulu shows picked up a number of Golden Globe nominations (with all the caveats the HFPA deserves), including Nomadland, The United States Vs. Billie Holiday, Palm Springs, Normal People, Ramy, and The Great. Those are all worthy movies or series. But NBCUniversal almost certainly will exercise its option to withdraw its content and sell its minority stake when that comes due in a year or two. What replaces that? More problematically, will Hulu have any international future as Disney rolls out Star overseas or will it be landlocked to an overstuffed U.S. market? This is in some ways the inverse of Question 1 above. Star may be the repository for all the local and non-Disney-safe content from around the world. But that’s another set of marketing questions, without the same easy sell that superpowered Disney+ this past year.
3. What happens to ESPN+?
The sports service is stuck between a fabulously profitable cable past and a painfully uncertain subscription future. The programming has been distinctly uninspiring or for precisely defined and limited audiences, mostly a collection of lesser live events, Stephen A. Smith, and leftover sports documentaries. The outcome of nearly finished rights renewals for the NFL may add a bit more clarity here, as ESPN/ABC reportedly will get streaming rights and more games to jointly carry. Surely ESPN+ will get a piece of what’s still the biggest thing on traditional TV. But are more than a few hundred thousand people going to pony up $6 a month for that? The question becomes especially sharp when both NBCU’s Peacock and ViacomCBS’ Paramount+ are making a big push for live sports as part of their base value proposition.
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