Netflix is the world's most dominant streaming subscription service, but it may only have one year to rest comfortably at the top. Then, the might of Disney is chasing it down.
Bob Iger, CEO of the Mickey Mouse-owning company, has revealed its video streaming platform will be launching around this time next year (the final quarter of 2019). In an earnings call with investors, where the business conveniently posted better-than-expected profits, Iger said the service will be called Disney+.
It has also commissioned some of the biggest names in its roster for exclusive shows. A spin-off series from Rogue One: A Star Wars Story, starring rebel spy Cassian Andor (played by Diego Luna) will appear on the service as well as a new Marvel-based series featuring Thor's brother Loki (Tom Hiddleston). Disney+ is also going to exclusively have a Monsters Inc film and a reboot of High School Musical.
The news of Disney's plans for a streaming service to rival Netflix isn't a surprise. The company first started talking about its plans in mid-2017 and said its platform will be "substantially" cheaper than Netflix. Iger said it would also pull its movies and TV series from Netflix.
But a lot has happened since then that puts Disney in a stronger position to take on Reed Hasting's market leader. In December 2017, Disney confirmed it was planning to buy the vast majority of 21st Century Fox for £54 billion. The European Union confirmed the deal could go ahead this week, as long as Disney gives up some of Fox's channels (such as History, H2, Crime & Investigation).
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The Fox deal has significantly added to Disney's portfolio: after the purchase goes ahead it will inherit the National Geographic channel, Ice Age plus the Fantastic Four and the X-Men franchises. National Geographic is already listed on the Disney+ website – which is just a holding page for now – alongside Pixar, Marvel and Star Wars. All will be providing shows to the new platform.
Speaking to Variety in August, Iger said Disney+ would include its new releases first. These include live-action remakes of Dumbo, Captain Marvel and the next Avengers sequel. Existing Star Wars movies won't be included, however, as they are already licensed to other broadcasters.
"Disney+ is well positioned to be a successful streaming platform," says Benjamin Burroughs, a professor of emerging media at the University of Nevada. He says the existing back catalogue of shows and films that it can stream to customers, plus the exclusive, streaming-only shows, mean that it will appeal to plenty of customers.
But content isn't everything. Netflix has two distinct advantages over Disney: people in almost every country around the world can subscribe, and it has already proved it can withstand competition (from Amazon and Apple) for several years. The company now has a large collection of its Originals – shows that it makes itself – and is continuing to invest $18.6 billion into making more of them.
Netflix's user growth in the US has slowed, but it has aggressively been pushing international expansion. In October, it announced it had reached 137 million subscribers, adding seven million new customers over the last three months. The majority of new members were outside the US.
"Netflix has other ammunition too," says Hemant Bhargava, a professor in technology management at the University of California Davis. "Its ability to pull and keep subscribers depends not just on what content they offer, but also on a variety of "customer relationship" and customer service features - their algorithms for understanding what kind of content customers like to watch, the ability to personalise the offerings and browsing behaviour, good technology for streaming, a global presence".
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Netflix has said it is making 30-35 non English-language Netflix Originals this year and plans to increase that to 100 in two years time. "Netflix isn't as reliant as content libraries from competitors such as Disney as they once were," Burroughs says.
At present, we don't know where in the world Disney+ will launch. It may initially be restricted to just Western markets. Disney+ won't be Disney's first streaming service, either, as the company has already been testing the waters with other platforms. In April, it launched ESPN+ in the US. The sports subscription service costs $5 per month and offers sports that the standard ESPN channel does not. This includes football matches from the UK, Canadian Football and more.
Initially, ESPN+ appears to have been a success. Disney says it has more than one million paying subscribers (although some of these are said to have converted subscriptions from existing ESPN products).
"ESPN+ has gained experience, and success, in striking content deals – for instance, to stream live events such as "League of Legends" e-sports," says Bhargava. "The success of ESPN+ is important for Disney because it is consistent with this shift in how people buy content today, from big content bundles mediated by for instance, a cable distributor, to "over the top" and even direct streaming of content."
And, there's also one overlooked Disney streaming platform that's been running in the UK since 2016. DisneyLife is primarily aimed at children but includes plenty of its recent big-screen releases, such as The Incredibles 2, Beauty and the Beast and the upcoming Nutcracker film.
Both DisneyLife and ESPN+ have given Disney some valuable practice in running streaming services. But while we'll still be waiting around 12 months for Disney+ to emerge, the company has given itself plenty of time to get in shape to compete with Netflix and others.
This article was originally published by WIRED UK
