Disney+ Enters the Streaming War

By, Sophia Krnjeta

Going up against industry leader Netflix, and well-established platforms such as Amazon Prime is a daunting task for any new streaming service. Despite this reality, Disney+ has seen great success in gaining subscribers and capturing audiences since its launch just under five months ago. 

In the short period of time since the launch of Disney+, the service has marked a strong positive impact on Disney’s overall revenue. Disney’s subscription-based streaming services, including Disney+, Hulu, and ESPN+, accounts for 13 percent of the company’s total revenue. Since 2018, revenue from this segment has grown over doubled. A large portion of this increase can be attributed to Disney+ subscriptions, reaching a total of 26.6 million by the end of 2019, closely behind the 30.4 million subscribers to Hulu. This number grew further in the beginning of 2020, surpassing estimates and totaling 28.6 million subscriptions by February. 

How has Disney+ been able to prosper in a considerably saturated market, and how is the service differentiating itself from its competition? 

The exclusive and original content provided by Disney+ is an important factor in their differentiation, offering titles from Disney, Pixar, Marvel, Star Wars, and National Geographic. The platform consists of well-known franchises, but is also consistently updated with new original films and shows. Most recently, with theatres closing due to the COVID-19 pandemic, Disney+ surprised subscribers with an early release of the highly anticipated Frozen 2. These exclusive releases and sought-after titles are a key component in driving consumers to the platform and keeping them subscribed. 

The competitiveness of Disney+ is heightened when combined with the company’s additional two streaming services, Hulu and ESPN+. Subscribers have the opportunity to purchase a bundle with all three streaming services for a discounted price and gain access to the broad selection of content provided on each of the platforms. Combining Disney+ with the diverse titles of Hulu, and the sports content of ESPN+ creates a unique value proposition of providing consumers with a broad selection of streaming categories and titles. 

Another factor in how Disney has entered the industry on a competitive note is their pricing. A subscription to Disney+ starts at $6.99 per month, whereas Netflix has reached $12.99 per month for their standard plan. This low early price reduces trialability and commitment barriers for consumers interested in subscribing to the new streaming service. 

While Disney+ has grown a significant subscriber base, Netflix continues to dominate as the top preference among consumers. A survey on streaming service preferences revealed that 47 percent of consumers would choose Netflix as their top choice, followed by 14 percent for Amazon Prime, 13.6 percent for Hulu, and 13 percent for Disney+. The most important factor for consumers in a streaming service is content, more so than price or bundling features. In the future, this may come to influence Netflix as they continue to negotiate their most popular shows such as Friends and The Office. An advantage that Disney possesses is the fact that they solely own the majority of the leading titles on their platforms. 

Although the video streaming market is saturated with dominant players, there is still substantial opportunity for growth. The market is expanding rapidly and is expected to grow approximately 19.9 percent by 2023. 

Disney+’s ability to compete against heavily established streaming services such as Netflix is most encompassed in their content and broad spectrum of entertainment categories. The future success of the service will be influenced by the titles they continue to release and their ability to keep up with consumer preferences.

Photo by Kon Karampelas on Unsplash.

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