The 5-Year Direct-to-Consumer Evolution of Disney Plus
Ever since Bob Iger announced Disney+ on November 8, 2018, it’s become the most-hyped OTT launch in history.
But Disney’s direct-to-consumer evolution goes back more than five years ago.
Training new customer behavior
In 2013, Disney began experimenting with releasing content, such as Teen Beach, Goldie & Bear, and Descendants, exclusively on their TV Everywhere apps (WATCH Disney Channel, WATCH Disney XD, and WATCH Disney Junior) before airing on traditional television.
Typically, TV-Everywhere apps don’t offer much more than you could get directly through a cable set-top, but Disney bucked this trend and began familiarizing fans with the concept of consuming programming on Disney-branded TV and mobile apps.
The company eventually launched a new TV Everywhere app called “DisneyNOW” which consolidated the WATCH Disney Channel, WATCH Disney XD and WATCH Disney Junior apps into a single experience.
Testing the market
In 2015, Disney launched its first direct-to-consumer streaming service, DisneyLife, in the United Kingdom. It offered thousands of movies, songs, TV episodes, and books for £9.99 (about $13) per month.
As is the situation a lot of companies are currently finding themselves in, Disney struggled to manage existing distribution deals while launching its service. For example, one might expect DisneyLife to include Star Wars movies since Disney owns Lucasfilm; however, those movies were wrapped up in licensing deals with other companies. And more often than not, the content on DisneyLife was already available on other platforms.
As a result, DisneyLife didn’t catch on, and some may even call it a failure. But Disney used the project as a testing ground, learning what customers wanted and how to retain them (i.e., exclusive content). They also expanded the service to Ireland to experiment with processing transactions in multiple currencies. Lastly, they ultimately decided to cut the price of DisneyLife to £4.99 (just under $7) per month. Notably, Disney+ launched at a $6.99 price point.
Securing the technology and the content
In 2016, Disney acquired a minority stake in BAMTech for $1billion, with the option to purchase a more significant stake in the future. Shortly after that, ESPN announced plans for an exploratory OTT project”.
In August 2017, Disney exercised its option to acquire a controlling stake in BAMTech for another $1.58 billion, increasing its ownership to 75%. The company also announced that it planned to launch an ESPN direct-to-consumer service in 2018, followed by an entertainment offering in 2019.
BAMTech would be later internally renamed to Disney Streaming Services.
In 2017, Disney started taking back it’s programming from Netflix, Starz, and other competitors as it prepped the launch of its global entertainment streaming service.
Later that year, it was reported that Disney was in talks to acquire 21st Century Fox’s filmed entertainment, cable entertainment, and direct broadcast satellite divisions. In March 2019, the deal officially closed for $71 billion, bolstering the House of Mouse’s catalog of content with gems such as Avatar and The Simpsons.
Disney enters The Streaming Wars
Disney+ officially launched yesterday and was met with several problems, but the hype was certainly not one of them. Digital TV Research predicts that DIsney+ will reach more than 101 global subscribers by 2025. It may have begun the day with over 1 million.
So while it may appear that Disney is entering the streaming wars as a newcomer, especially given the technical hiccups, the company has had over five years to prepare. And as long as they can resolve the bugs quickly, which it appears like they have, they’ll be given a pass.
In most instances, hiccups will resolve.