Homer Simpson, Darth Vader, Iron Man, Buzz Lightyear and Captain America are property of the Disney empire and, since november, will be enjoyed exclusively by subscribers to Disney+, its new streaming platform.
Pixar, Star Wars and Marvel, plus National Geographic documentaries and series, join this audiovisual giant to make it an even bigger competitor. Against this backdrop, Netflix, until now the undisputed leader in video on demand subscription platforms and celebrating its twenty-second anniversary this August 29, will have to pull out all the artillery to retain its market share in the Mickey Mouse industry.
Can Disney+ take the throne of Netflix?
The monthly price of the Disney+ service will be cheaper than that of Netflix. This is a key point, no doubt, although such an affordable tariff makes coexistence with a second and even a third service perfectly viable for many families.
Disney+, with the recent purchase of Lucas Films, has in its possession the Marvel and Star Wars universes. Is this a threat to Netflix? More than a threat to competition, it is, along with price, the main attraction for capturing customers. Bob Iger, the company’s CEO, announced that during the first year they will release twenty-five series and ten films, although it is rumored that there will be many premieres of their own but few new stories that leave the circuit of their great universes. Disney’s offer of starting originals compared to Netflix’s is quite scarce, although the muscle in its catalogue cannot be underestimated. In addition to its most popular children’s titles, will be added the titles published under the Disney Vault strategy, those films that had previously been exploited in home entertainment in a limited way and now will be available for the first time in digital broadcast. But how long will the catalogue be able to maintain an optimal high attraction?.
The Disney brand has been and is closely linked to the world of children; could it be a problem? It is true that it has a very powerful resonance among the children, but much of its catalogue appeals to older public. Being able to offer entertainment to different viewers according to their age can become their great competitive advantage. It’s ideal for having a suitable offer for children, but it allows hours of infinite entertainment for adults when the little ones are already in bed.
The recent remake of Disney’s Lion King has become the biggest blockbuster animated film in history with 1.189 million euros in global revenue. The cinema circuit and video-on-demand (VOD) are married or competing; will they use their VOD service to release films there to attract potential subscribers? Given the box office of their latest releases, the strategy of spending the films on their SVOD service before or simultaneously with the theatrical release is very unlikely. Disney is an expert on tent poles; it knows full well that much of its success is in theaters and will not give up on them.
Disney also bought the Hulu platform: what is supposed to happen to it now? Probably it will be the place where unfamiliar content will be accommodated, for example, the properties of rated R superheroes (adult content) or many of the FX series.
What will the other platforms do? Netflix seems to have a clear roadmap: a lot of original content (increasingly aligned with the preferences of its customers), an increasingly refined recommendation system and the best user experience, in short, the three axes that translate into hours of content seen, the key to avoiding churn or loss of customers. And, of course there are phenomenal programs, such as Stranger Things, which are the gateway for attracting new customers.
Disney receives revenue from many sectors, unlike Netflix, which lives on its ability to convince the user with series and promotions to pay an additional month’s fee. t’s not a question of economic soundness, but rather that Netflix is spending more than it earns. According to data from this quarter, cash flow was again negative, close to 594 million dollars. It closed in 2018 with a treasury hole of more than 3,000 million dollars fruit of the billions destined to the production of original content. For Disney, Disney+ is just … a plus.