Disney+: Where Streams Come True
America has certainly become a country divided in recent months: those with Disney+ and those who wish they had Disney+. Racking up more than 10 million subscribers within 24 hours of its inception, Disney+ harps on the power of nostalgia in offering viewers a seemingly endless array of magical classics, along with reboots of popular movies and shows.[1]
Utilizing its treasure trove of intellectual property is far from a foreign concept to Disney; its entire business model is predicated on the restyling and rebranding of the characters (intellectual properties) that we fondly associate with our childhoods, from endless sequels to live-action remakes of its most renowned classics, such as Aladdin and The Lion King.[2] One need only refer to Disney’s monopolistic-like behavior over the past two decades—the acquisition of pop culture powerhouses Pixar Animation Studios, Marvel Entertainment, Lucasfilm, and 21st Century Fox—for a glimpse of how Disney mines for intellectual property.[3] The massive success of these ventures—coupled with the billion-dollar grossing successes of the aforementioned live-action remakes of both Aladdin and The Lion King—essentially leaves Disney with almost no choice but to employ a parallel strategy for how its streaming service functions.[4] Disney’s optimism is mirrored by stock analysts, who foresee roughly 90 million Disney+ subscribers by 2024.[5]
The dawn of Disney+’s reign has spurred a panic in rival streaming services in an effort to keep up; surveys such as one done by Fortune have found that around one in three users of Netflix, Hulu, and Amazon say that they’re likely to subscribe to Disney+.[6] Netflix, for one, keenly aware of the foreboding threat posed by Disney’s wide breadth of intellectual property, spent roughly $15 billion on original programming in 2019 in an effort to maintain a firm grasp on its subscribers.[7] Like Netflix, fellow streaming services such as Amazon and HBO have begun heavily investing in shows and movies that have franchise potential as a means of acquiring and maintaining commitment from their respective viewers.[8]
However, the all-encompassing nature of Disney’s business model, which relies heavily on both merchandise sales and substantial foot traffic at its various theme parks, is what truly enables Disney to distinguish itself from the likes of Netflix, Hulu, HBO, and Amazon and propel itself to the top of the streaming service arms race. Even prior to the birth of Disney+, experts have been intrigued by how Disney injected its investments of the intellectual properties of both the Star Wars and Marvel franchises into its other business ventures, most notably in the form of attractions at its theme parks.[9]
That said, the onset of Disney+ has enabled Disney to form a distinct kind of relationship between the intellectual property made available on its streaming service and its theme parks/merchandise, one in which both of them thrive.[10] The access to old, classic Disney content reignites consumer interest in them, thus affording Disney more opportunities to create new attractions at its theme parks that cater to what consumers are watching on Disney+.[11] Indeed, Disney CEO and Chairman Bob Iger has duly recognized the importance of unlocking Disney’s treasure trove of intellectual property for the public, and stresses that Disney’s focus is on building Disney+ into a main driver for the company.[12]
Conversely, Disney’s status as the leader in the theme park industry[13] serves as its own form of catalyst for the growth of its streaming service, as the Disney experience has morphed into one that is all-encompassing and seemingly never-ending, following you back into the comfort of your own home. Disney is anything but shy when it comes to acknowledging its shrewd, expansive business model, as Iger has readily acknowledged that Disney looks at its content “…as more than just films and film franchises. We look at them across multiple businesses and with different creative strategies in mind.”[14]
The power and vastness of intellectual property in Disney’s arsenal is certainly not lost on Ted Sarandos, Netflix’s head of content. Sarandos notes how Disney keeps to within the worlds of its intellectual property, while he champions Netflix’s approach of reinventing across various platforms and universes, unconstrained by a handful of universes.[15]
Some industry experts opine, however, that Netflix must strive to be more like Disney if it wishes to tread water in the streaming service arms race.[16] Much of Netflix’s more popular “original” content is comprised of putting a fresh spin on an already-existing brand, a business model that breeds commitment to individual shows as opposed to Netflix as a whole—a Fuller House fan is not necessarily a Netflix fan (pardon the LSAT logical reasoning flashback).[17] Disney’s wholly owned content enables it to branch well beyond its shows and movies and expand its empire, one that is worth more than four times that of Netflix, even before the launch of Disney+.[18] The hoarding of bona fide original content, coupled with creative and strategic expansion, forges Disney+’s path to the heart of the consumer, making Disney’s own stream dreams come true.
Footnotes
