Disney+ Is Now the ‘Central Part’ of Disney Brand and Future
By Cooper Dowd, Staff Writer
Then-CEO of Disney Bob Iger called the launch of its new streaming service, Disney+, “a bet on the future of this business.”
Although Iger’s prediction was technically correct, Disney+ surpassed expectations by shifting focus from the century-old entertainment company’s strategy.
“It’s become the central part of Disney,” Jeffrey Cole, director of USC Annenberg Center for the Digital Future, told CNN Business. “Most of us anticipated it would take two or three years to get to these subscription levels, to be this central, to be an important source of revenue, to become a part of the culture — and it happened in months because of the pandemic.”
Disney+ is just days away from its one-year anniversary and rocketed to its long-term goal of 60 million subscribers in its first nine months.
Disney+ came at a crucial period in entertainment history as a whole, as COVID-19 became the downfall for many businesses.
The pandemic has hit Disney harder than most, as its theme parks and resorts were closed. Its productions stalled and delayed its blockbuster movies.
The unfortunate circumstances already resulted in thousands of layoffs, but Disney+ had an undeniable impact on the company’s survival.
Although the rest of Disney suffered, Disney+ has thrived.
Consumers in lockdown turned to streaming services amid lockdowns and theater closures. Disney+ attracted viewers with beloved brands like Disney Animation, Marvel Studios, Pixar Studios, and Star Wars, which became the “absolute forefront of the company,” according to Cole.
The pandemic forced Disney+ to adapt quickly, but the company seemed ready for the abrupt pivot.
“Disney+ has been the one shining star in the Disney empire in 2020,” Trip Miller, a Disney investor and managing partner at hedge fund Gullane Capital Partners, told CNN Business. “The advent of the Disney+ platform could not have come at a better time.”
Miller added: “It seems like half luck and half brains, from a timing perspective.”
Unfortunately for the streaming service, their major success is still a far cry from where the company needs to profit.
According to estimates from media research firm Moffett Nathanson, Disney+ could lose $2 billion for its parent company this year and another $2.2 billion in the fiscal year 2021.
Disney itself expects its service will not become profitable until the fiscal 2024 year.
“I think Disney+, and the rest of their direct-to-consumer assets like Hulu and ESPN+, are the most important units in the eyes of investors,” Michael Nathanson, a media analyst and founding partner of MoffettNathanson, agrees. “It’s a source of long-term growth and helps offset [factors like] cord-cutting and shifts in audience behavior.”
Despite the many concerns of streaming competition, new content, and the pandemic’s continued effects, the first year of Disney+ is a significant victory for the struggling company.
“They are really all in now,” Nathanson said. “Disney has built a lifeboat that gets them through the current storm in traditional media.”