There were a couple of notable moves from Disney last week as the company tries to adjust to the rapidly shifting landscape while still balancing its unwieldy portfolio of both new and old school businesses.

Right before the Thanksgiving break, they announced that they would be spending $33 billion on programming across all their various properties (Disney+, Hulu, Star ABC et al) , a sizable bump from the $25 billion they spent last year.

By comparison, Netflix spent a paltry $17 billion on originals. Though to be fair, Netflix is buying programming for a single outlet, not an entire family of them.

In an unrelated-but-maybe-not-totally-unrelated move, Disney bumped the price of its Hulu Live TV vMVPD by $5/month, but threw in access to both Disney+ and ESPN+ as part of the bargain, which is actually a net win for consumers, pricewise, anyway.

Why It Matters

Disney has a lot of plates in the air as they try to keep both their legacy services and streaming services afloat.

Disney+ has decades of Disney branding to rely on, plus a lot of IP to draw from, yet it’s been struggling for subscribers and last quarter’s gain of 2.1 million subs was well below Wall Street expectations.

Hulu is even trickier, as many observers credit the success of Hulu in part to its library of recent NBCU programming, a library that may disappear at the end of 2024, when Comcast’s contract with Disney is up. It’s been telling that Disney is promoting its “not quite so G-rated” channel as “Star” outside the U.S., and it would not surprise anyone if Disney changes the Hulu brand to Star if and when the Comcast deal expires.

That said, upping spending on originals is a smart move though not a guarantee of much since the programs actually need to be hits. That’s something a lot of people forget about TV programming: there’s no magic formula you can use to guarantee that a show will resonate with audiences, and even franchise series (of which Disney has plenty) aren’t always winners.

On the Hulu side, there’s a lot Disney needs to figure out with Hulu, but unfortunately they can’t do much on that front until they know what Comcast’s ultimate plans are, and even Comcast doesn’t seem to know what its plans are--much, it seems, will depend on where Peacock is as the 2024 contract expiration date draws closer.

Adding Disney+ and ESPN+ to their vMVPD was a smart move though, as vMVPDs seem to be newly popular again among people who want to say they “cut the cord” without actually, you know, cutting it. Having that three-Flix value proposition gives Hulu a big leg up over YouTube TV, its main rival, not to mention Fubo, Sling and DirecTV. That’s not nothing at a time when we expect vMVPDs to be hot, for the next several years, anyway, as a sizable number of viewers slowly wean themselves off traditional pay TV.

What You Need To Do About It

If you’re Disney, make sure you don’t fall into the trap of thinking that just because someone commands a lot of money, they’re guaranteed to be a hit maker. So rather than trying to exclusively lure big name talent, give some love to the up and comers and independents, as those are going to be the likely sources of your next big hits.

If you’re on the production side and the likely beneficiary of those billions, remember that this is still a tricky transition for all those writers, directors and actors who were used to working full-time on shows with a 25-episode nine-month season, and the uncertainty (or unfamiliarity to be exact) of the streaming world will take them some time to adjust to.

If you’re one of the other Flixes, time to loosen up those purse strings because you’re going to have to spend some big bucks compete with Disney for talent, if not volume.

The FASTs Go Big

The various FAST services have been very active of late. Tubi is launching on LG TVs in the U.S. and Canada, making it the 29th device the Fox-owned FAST is now available on.

ViacomCBS-owned Pluto is making plans to conquer the Nordics (Denmark, Norway and Sweden), bringing the total number of global markets it is available in up to 26.

And WatchFree, VIZIO’s own FAST platform, just announced that it would be making over 5,000 titles from Disney, Lionsgate and Sony (among others) available as part of a newly launched VOD library. 

Why It Matters

The FASTs are continuing to grow, expanding their presence globally while continuing to add programming and features domestically. 

They’re becoming a real force in the new CTV ecosystem, precisely because they have ad inventory. This is key because while brands continue to want to use CTV to reach viewers they are missing on linear, the truth is that there just isn’t all that much inventory available. The five Flixes that offer an AVOD option (Discovery, HBO, Hulu, Paramount and Peacock) also have an ad-free option, and they have a very limited number of ad breaks, especially when compared to traditional linear TV.

Thus the FASTs are an easy and popular venue for advertising, both in the U.S. and overseas. 

They are also popular with consumers in that they are free and they feature a broad range of programming options along with the look and feel of old school cable. (And I mean that in a good way--people like having a wealth of options and being able to click through the program guide to see what is on.)  

There’s a tendency to forget that there are two ways people watch TV—leaning in to new series they are watching intently and leaning back with old favorites, “comfort food TV” that does not require the same degree of focus and emotional investment. That’s a big plus for the FASTs who have a broad array of familiar programming (though they are starting to produce some originals too) organized in an easy to view manner with (for most all of them) the option to then binge those series via VOD.

It’s a compelling proposition and the “free” part makes it even more compelling, as does that fact that many of the FASTs come pre-installed on the TV’s OS, e.g., one less thing for viewers to have to figure out.

What You Need To Do About It

If you’re one of the FASTs, you’re in a good place with advertisers and consumers, now all you have to do is smooth out the advertising experience. Meaning no random insertions in the middle of scenes (leave that for YouTube), getting a handle on frequency capping and continuing to keep the number of ads manageable.

And while linear-like channels are a great idea, VOD is key too, as viewers then have the option to binge watch old favorites, a very popular option.

If you’re an OEM, the more you can beef up your own FAST content (or bring in popular existing services) the better, as it’s a great way to keep both advertisers and consumers smiling.