How Disney Fixes Its Current Batch Of Streaming Issues
As has been covered in this space numerous time during 2022 already, the Walt Disney Co. has some problems across the business. On top of the culture war it seems to be losing on both fronts, its stock price has plummeted (down 40% in the last six months alone.)
And if all that wasn’t bad enough, the loss of streaming rights for Indian Premier League cricket could see Disney+’s global subscriber numbers dip by 20 million within a year or two.
Add CEO Bob Chapek figuratively “stepping in it” at least a few times this year on numerous fronts, and you could write forever about what ails Disney and how to fix it.
Rather than do that, we’ll focus a little more narrowly here.
Disney’s pegged a lot of its future to streaming, but needs to get that house in order to meet a goal of at least 230 million global subscribers by the end of fiscal year 2024. How can they do that? We have some suggestions below.
Buy Comcast’s share, then fold Hulu into Disney+
Under the terms of assuming ownership of a majority of Hulu, Disney could be required to to buy Comcast’s remaining 33% stake in the streaming service as early as 2024. That’s why Disney’s been cautious to avoid driving up the value of Hulu both at home and abroad, leading to the service sitting in a bit of limbo.
Sure, there’s a reality where Comcast may want to keep its stake in another ad-supported streaming service given the value of that recurring revenue. But if given the opportunity, Disney can un-muddy Hulu pretty quickly once the service is fully under its control.
With Hulu completely a Disney property, the service can be folded into Disney+ as a separate “channel” on the service — much like it already is in many markets outside of the U.S. Ideally, though, Disney should also to fix the confusion around FX here, too., meaning:
All original and on-demand adult programming sits under the FX banner on Disney+
The Hulu Live TV service is untethered from the on-demand side as a standalone brand
Here, you’re clearing up the confusion about what the Hulu name is supposed to mean to consumers, while also resurrecting the value of FX. If subscribers to the Disney bundle don’t want live TV, they’ll get access to FX content as a header on Disney+ along with the other name brand already there (Disney, Marvel, National Geographic, Pixar, Star Wars).
If they want live TV, Hulu is up there as well, and choosing it shuttles them to an altered interface. Speaking of that separation…
Fold ESPN+ into Disney+, too
It’s clear that the Disney bundle was going to lead to this anyhow, right? And with ESPN in a weird place now with the ACC Network (minimal audience) and Pac-12 rights (should they just buy the Pac-12 Network now?), this is a simple solution that increases exposure to those properties and everything else sports-wise, too.
At the same time, it further integrates ESPN content into the larger Disney brand in a way that Hulu has already started to do. While TVREV readers likely know that Disney owns ESPN, many consumers don’t necessarily associate the two entities. Having a clear connection that ties everything together makes it easier to sell the full family of Disney content, using whatever “bait” a particular consumer may have as the impetus for signing up for the full offering.
As Disney gets less beholden to cable and satellite fees, putting ESPN right in front of consumers through an expanded Disney+ app also helps speed that process along. The more cord-cutting that takes place, the more Disney can shuttle people off to Hulu’s Live TV platform and charge more for targeted streaming ads across its spectrum of entertainment properties.
Related to the above: Win the NFL Sunday Ticket deal
Whether they fold it into Hulu Live TV or ESPN+, Disney winning Sunday Ticket would be a huge boon to the idea above. While they’ve set a target price below what the NFL seems to want, they also may be the only serious bidder — since they need the subscription package more than Apple or Amazon do, despite both conceivably having deeper pockets.
Even if the NFL keeps local blackouts in place, a Disney-controlled Sunday Ticket helps speed up the wider consumer shift to streaming, and increases the cards Disney holds in that ecosystem. Further, if they actually buy NFL+ as part of the deal (as the NFL would prefer), now they have yet another BIG brand logo to add to that expanded Disney+ marquee. Doubters would be running out of reasons why they should avoid subscribing at this point.
Lastly: More content for more people
Former Disney CEO Bob Iger said last December that Disney+ needs “more content for more people.” While that’s sort of addressed above while altering the service to become a wider streaming hub, the content on Disney+ itself also needs to change.
We’ve seen some of that already, with Hamilton, the Beatles doc Get Back, Billy Eilish concert event, this week’s announced BTS deal and more. But Disney+ has to keep going along that road — concerts, musicals and reality-style TV around already famous performers — to find the next angle to both attract new subscribers and keep existing ones around.
As has become abundantly clear at this point, the service banked on Star Wars and Marvel IP to be growth engines, but that momentum has stalled as both franchise values could now be at risk of overexposure. While your author is a Marvel fan, it’s even easy to see what’s happening from within that audience. A franchise built on quality is now leaning too much into quantity with shows, while ALSO failing to deliver at the same success rate with the movies that it did over the course of its first 23 films.
No, you shouldn’t halt all production on Marvel or Star Wars TV shows. But there’s some fat you could probably trim at the same time while emphasizing other IP or music-related projects. As a Marvel fan, am I desperate for Agatha: House of Harkness at this point, when the WandaVision spin-off is unlikely to arrive any time soon or have any real bearing on the MCU narrative? No. Granted, I’d love to see Kathryn Hahn return to the Agatha Harkness role she portrayed so well in 2021. But that could happen in a movie, too. The same goes for various other shows that seem like they could come off as filler, even with the best intentions behind them.
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I’m not claiming any of the above is simple, or cheap. But it’s all relatively attainable without Disney making fundamental shifts in what its business is. As the next stage of the so-called streaming wars starts and Disney adds yet another ad-supported service here (when Disney+ brings that tier to market), it’s going to have to embrace change in order to stay on subscribers’ radars as they look to narrow streaming choices to what’s essential. The above makes Disney pretty hard to avoid.
