Disney’s Big Bet on Streaming
Cannibalization is by far the most difficult feat any established, successful company can pull off. Disney’s efforts to create a streaming video service years after Netflix and then Amazon (AMZN, -0.24%) beat the entertainment giant to market will be one of the great self-attacking experiments of our time.
The challenge is an old one. What to do with a leading business that’s challenged by a new technology wave without hurting an existing profit stream? The single greatest example of recent memory is Apple’s willingness to decimate iPod sales by incorporating all the category-defining product’s features into a new gizmo, the iPhone. The iPod was once so important to Apple that the estimable journalist Steven Levy wrote an entire book about it. And then, poof! The iPod was nearly gone. Yet Apple (AAPL, -0.19%) barely looked back.
Now Disney belatedly plans its own streaming service. Longtime CEO Bob Iger unveiled some new details about the service Thursday, including that it will be less expensive than Netflix (NFLX, -1.87%), that it will launch in the second half of 2019, and that new TV series based on big Disney-owned franchises will be part of the service.
Chief executive Bob Iger gave investors a peak at the programming they can expect from the as-of-yet-unnamed offering, on the company’s earnings call yesterday:
- The latest Star Wars, Marvel, Pixar, and Disney movie releases
- 4-5 original feature films a year produced exclusively for the service by Disney’s studios
- A live-action Star Wars series
- A Marvel TV series
- A series based on the Pixar film franchise, Monsters, Inc.
- A High School Musical series, based on the 2000s Disney Channel TV-movie franchise
- Other originals and movies from the Disney Channel
- Short films and features from across Disney
- Back catalog with “thousands of hours” of Disney movies and TV shows
When asked how all of Disney’s proposed streaming programming—which could venture beyond the wholesome G-rated fare families expect, especially if it dives into the edgier end of Marvel—would work with the overall Disney brand, Iger likened it to its theme parks.
Can Disney pull off this magic trick? Its quarterly results revealed it has no choice and that perhaps Iger should have gotten on with things sooner. Film, TV, sports, and cable all were dark spots for Disney in the quarter. Only theme parks shined.
But Disney said it isn’t trying to be the “Netflix killer” the media has made it out to be.
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