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by Natalia Revishvili on November 12th, 2019

Disney investing big in Disney+

Disney was always a company that was led by people with their own vision and opinion on the company’s future. We can say that the heritage of the company as it is now – strong and versatile – started back in 1937, when everyone, literally everyone, was telling Walt Disney that no one will sit through a movie as boring as “Snow White and the Seven Dwarfs”. He didn’t listen and you know what? The movie became the most successful animated feature in America. This predicted and set the path for the future evolution of the company.

Now, 82 years later, we can witness the same thing happening. The company is getting ready to launch a rather risky and even controversial project Disney+.

The project is scheduled to be revealed in a week, next Tuesday, in the United States, Canada, and the Netherlands only (for now). That is only now when this huge corporation decided to take part in a battle for consumers’ time and money with Netflix, WarnerMedia, even Apple which is also launching its own streaming platform in no time.

disney+

According to Disney’s CEO, Bob Iger, Disney+ will represent a completely new cycle of life for the corporation. For decades, Disney was known for its mega-blockbusters, thematic parks TV shows, Buzz Lightyear action figures, etc. But now the stakes are higher than ever as Disney is stepping up into the world of digital media.

Why bother at all?

Many might ask this question. And they will be right actually – why it is so important for such a big corporation to invest huge money into a new unit that might not even perform the way they think it will? The company already holds a status of the most dominant media company, has a generation of true fans, and can be already named a very lucrative business.

A director of USC Annenberg Center for the Digital Future, Jeffrey Cole, answered this question fairly simple. Disney needs to adapt to the ever-changing media environment and not be left behind while other companies are capitalizing on their digital media investments. In order to keep their heads above the water, they need to keep up with the changing trends of the surrounding environment.

Cole mentioned in one of his recent interviews:

“Disney is fully committed to streaming because they think that streaming is going to be at the core of the whole company going forward.”

Meanwhile, Iger told reporters:

“This is a bet on the future of this business.”

He added:

“It’s going to be the most important product our company has launched in a long time, certainly in my tenure.”

Disney’s main USPs

Among the obvious strengths of Disney over its main competitors is its price. The developers want to hop on the train of online streaming they almost missed by setting a relatively low price of $6,99 for a monthly subscription.

Apart from that, they have a huge collection of the movie they own: Marvel films and shows, an original Star Wars series, Pixar films and documentaries from National Geographic, as well as original Disney animated classics. They will also stream “The Simpsons” on their platform.

They also announced “Avatar” and “Avengers: Endgame” to be added to the list of movies starting from the launch straightaway. That means they’ll have two highest-grossing films of all time on their platform.

disney-plus

Many experts researching that field agree that “Disney’s primary advantage is its extensive catalog of content.”

Former “Disney Vault” was the only option the developers were able to provide users with the ability to watch the movies on home video, but for a limited time only. And we can get it, it must be very frustrating to be stopped halfway of the movie. That, however, will be finally changed with the appearance of Disney+.

One of the professors from the University of Texas’ Moody College of Communication told:

“While this scarcity model certainly benefited Disney, the promise of having access to everything in the Disney vault on demand is a huge draw for fans.”

The marketing aspect of the project

Disney marketing is doing a pretty good job of promoting the company’s new project without actually going outside their own marketing channels. You can see Disney+ ads on the way to Walt Disney World in Disney buses, or while enjoying the Disney Cruise Line, which carries out approximately 12,000 passengers per day.

Barnes made a quick comment on this matter:

“Disney already has a direct connection to consumers. Every theme park customer coming through the gates is someone to market Disney+ to. They have Disney credit cards. People own Disney time shares. Disney cruise ships. None of those things are similar to other companies.”

The stakes are very high for Disney right now. As they might simply lose tons of money without being able to earn them back for a long period of time afterward. According to calculations, Disney’s investment can result in a company losing more than $2.3 billion in the fiscal year 2020 and another $2.1 billion in the fiscal year 2021 in operating costs.

A media analyst and founding partner at MoffettNathanson, Michael Nathanson, said:

“It’s going to basically require many years to recoup the losses. And they may have to spend even more money than they currently believe to keep that flywheel of fresh content going.”

Regardless of others might say, Disney employees believe in the project and are pretty hopeful about what the future hold for it. Thus Cole said:

“I think it’s got a better shot than any others. They’ve priced it right, they bring a brand and it comes at a great moment in history for the company.”

The only thing we can do right now is to wait and watch Disney do its magic.

By Natalia Revishvili

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