The success of its new Disney Plus streaming service has given Disney a big boost on its ascent to the higher ranks of the streaming media industry.
Over the past few years Disney has been shifting its focus to streaming media. Its efforts are paying off. The company’s quarterly results showed a 36% jump in revenue, due largely to the runaway success of Disney Plus. Within a day of its launch on November 12, the service had 10 million subscribers (including those who signed up free with a Verizon promotion). By February 3 it had 28.6 million subscribers. Disney’s per-share profit for the quarter declined by 17%, but this is owed to the cost of building out Disney Plus.
“It’s often challenging for a company to pivot in a new strategic direction, particularly when it involved navigating between established and emerging business models,” said CEO Robert Iger. “We have made an extraordinary amount of progress.”
Keenly aware of the disruption of the media industry by digital technology, Iger had been hatching ideas for a digital platform years earlier. In 2015 he tested a streaming app called DisneyLife in Britain, and later purchased a $1 billion stake in BAMTech, a tech firm that worked on HBO’s app. In 2016 Iger announced that Disney would shift its priority to streaming by creating Disney Plus and ESPN Plus. Stepping up content creation, the company launched the Disney Digital Network in 2017. “We were now hastening the disruption of our own business,” Iger wrote in his 2019 memoir.
Disney made a further advance into the streaming media industry in 2019 when it purchased a 33% stake in streaming service Hulu from Comcast. Disney was already Hulu’s majority owner, having acquired assets from Fox earlier that year. This gave it full control.
As it shifted its focus, Disney underwent a restructuring, “to put greater focus on content creation, technological innovation, global expansion and direct-to-consumer distribution”, the company said in a 2018 news release. This involved combining some of its operations to create four business units: Studio Entertainment; Media Networks; Parks, Experiences & Products; and the new Direct-to-Consumer & International, which includes the digital platform and streaming services.
The success of Disney Plus in North America has prompted Disney to accelerate its overseas rollout, the New York Times reports. The service will be available in Britain, France, Germany, Spain, Italy and other European countries starting on March 24. Disney Plus will land in India a few days later.