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Disney+ a good start, content flow will define success


With a great experience, solid download facility, and outstanding library, Disney+ is a slam-dunk for families with small children. However, getting and keeping 60 to 90 million subscribers requires a level of new content flow that will test even Disney’s prodigious creator capabilities.

It looks like the launch of Disney+ has mostly been a success. Initial problems with the service seem to have diminished. It has generated a sizable social buzz, though rival Netflix still commands far more attention. All-in-all, the company seems pleased with how things went. It touted “extraordinary demand” and claimed to have 10 million activations. Such interest bodes well for Disney achieving its stated goal of 20-30 million U.S. and 60-90 million worldwide subscribers by 2024.

However, activations are not paying subscribers. Everybody activating the service is still using their seven-day free trial and may cancel before they make a payment. As well, many activations could be Verizon Wireless unlimited customers, who receive the service for free for one year. That said, some analysts are bullish enough on Disney+ to forecast it will substantially exceed its subscriber forecasts.

How will the company achieve its subscriber targets once the novelty of the new release has worn off? In its existing form, it looks to be a shoo-in for families with young children. However, Disney needs to jump-start its content creation engine to create loyal subscribers outside of its core demographic.

Homes with young children are Disney+’ base

At launch, Disney+ is stacked with movies from the massive Disney movie vault. All the favorites are here, as well as ancient but kid-friendly content like the Absent-Minded Professor and Herbie Rides Again. There are also many shows from the Disney Channel available. All-in-all, the service hosts some 600 movie and TV show franchises. What’s more, Disney allows parents to create child accounts that block anything unsavory. Parents can hand a tablet with Disney+ installed to their child and know they are in a safe, entertaining space.

Moreover, Disney was wise to include a robust download facility at launch. Parents will want to keep their phone or tablet loaded with kid-friendly content to keep their children happy in the car. The full-featured offering provides selectable download quality, background downloads, and the ability to reorder multiple downloads. However, rival Netflix provides an essential parent-friendly feature Disney has left out. Netflix will automatically download the next episodes of a show being watched in sequence by a viewer.

At $7 a month, Disney+ is a steal for families with small children, and most will quickly sign-up and keep paying their monthly bill.

Transitioning to a daily service

As it stands now, Disney+ is a service many users will check in with weekly. Disney has stated its intention to release new series on a weekly. With few original shows available at launch, many people will find just one or two that engage them. They will check in with the service each week to catch the latest episode.

Netflix understands how vital new content is to transition from a weekly to daily, anchor service. In an average week, Netflix debuts 35 new shows. Subscribers know they can come to Netflix every time they want to watch and likely find something new.

The Hulu bundle could be Disney+’s best friend here. For the same price as Netflix mid-tier plan, a viewer can get Disney+, basic Hulu, and ESPN+. New episodes of television shows arrive on Hulu every day.

That said, Disney+ can build a large subscriber-base of weekly users at $7 a month. However, were the company to raise the price to be more in line with peers, things could change quickly.

Expect large fluctuations in subscribers, high churn

Tentpole movies will be a prime mover in attracting subscribers to Disney+. For example, when the latest Avenger’s movie drops at the beginning of December expect a surge of subscriptions. However, keeping all those subscribers is highly dependent on keeping the flow of top content coming. At least initially, that could be a struggle. Disney is undoubtedly the biggest and most successful movie studio. However, the films are scattered among many brands with some, but not necessarily much cross-over appeal. For example, an Avenger’s fan might find The Incredibles appealing but Beauty and the Beast not.

The tentpole movie dynamic is liable to lead to a great deal of fluctuation in subscribers, as people sign up to watch a new movie release and leave soon after. As well, churn is likely to be high as overlapping movie releases cause groups of fans to join and leave.

Why it matters

For Disney+, a successful launch is just one step on the long journey.

The company will attract many families with small children as loyal subscribers.

However, it will take all of Disney’s content creation prowess to achieve the ambitious subscriber targets the company has set itself.


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