Yes, Disney had a plan. Their plan was to make it into a girl brand by any means necessary. I spoke of this at length over this past weekend.
But their big plan is beyond the Marvel Cinematic Universe or the Star Wars saga. No, a company like Disney needs to hold onto the audiences they have in a market that is becoming increasningly harder to compete with.
For example: a cat video can get millions of views and it cost practically nothing to make.
A movie trailer sometimes gets thousands of view and it cost millions / tens of millions to make. That is hard to over come.
It is hard to overcome a business strategy like the kind that MARK DICE, GEEKS & GAMERS, NERDROTIC, DOOMCOCK, and other Youtube commentators when you’re in a similar businesses model like ENTERTAINMENT TONIGHT, CNN and other MAIN STREAM MEDIA that comments on popular culture.
Constant content is key. It’s like a drug addiction, you have to get your daily fix. Otherwise you’ll go looking elsewhere.
A library of content is key. But only if it’s new content. Content such as a legacy library of shows is/are a diminishing asset.
How many people watch old black and white movie serials, or Six Million Dollar Man, Barnaby Jones, Rifleman or M*A*S*H, compared to contemporary products such as Game of Thrones, Walking Dead, Mandalorian, Trollhunters and other such products?
The old cable system of delivering content to you was a shell game. “Hey you can have hundreds of channels to access and get your fix.” But, no one has the time in the day to watch hundreds of channels. And we don’t want to pay $35 to $100 plus every month for something we can’t take full advantage of.
So we received a system presented to us where we have a choice; the streaming service. Netflix already has a great running start and are well ahead of their competition. Amazon Prime, Hulu, Apple+, and Disney+ effectively just left the gate. But both Apple Amazon and Disney had one solid strategy before them, and that was to spend a lot of money and get a lot of shows in the can and up on their individual platforms.
They need to retain customers. Right now these companies are in a twilight zone of non-customer participation. For instance Disney and Apple offer a year of free access to the streaming service before you start paying. For Disney it’s a partnership with Verizon customers. For Apple if you buy a new iPhone. They’re both hoping that their streaming service becomes a way of life for you, and that you can’t do without it, which transitions that passive customer into an active participating customer.
I had worked in internet marketing in the past. All of the decision makers in these companies had a clever system running. It went something like this:
A client wants to advertise their product to the internet. The marketing company says no problem, we can get your product into the attention of thousands upon thousands of people. Deal is made. Marketing company makes the ads. The ads are deployed. Client is happy to see thousands if not hundreds of thousands people have liked or are clicking on the link to their product page. Everybody is happy. Client has lots of people looking at their product. Marketing company gets paid for a job well done.
But wait, no one is buying the product! What is going on? Client eventually calls the Marketing Company to complain. Marketing Company tells them that they brought the people to their site, it seems that people are not interested in their product. The end, right?
What is the hidden factor in this example? The Marketing Company deployed fake customers / subscribers.
The more subscribers you have the more you can charge for advertising / service work. The product is a red-herring.
Why would there be subscribers in the tens of millions with some accounts on Youtube, Facebook, Instagram and Twitter and the interaction / participation from the followers is a fraction of the subscriber numbers? Curious isn’t it?
The subscription model is a finite model that will peak at a certain point. If the company maintains an expense to profit ratio that is consistently level, then they will do fine. BUT, they will not grow. If the company attempts to grow, they will end up on the red side of the balance sheet. So what can be done?
Disney and Amazon have a retail market outside of movies and shows. They can maintain and spend money to slowly grow when the opportunity presents itself.
Netflix has no retail market outside its streaming service. So if Netflix wants to keep its head start, it has to reach out and buy a retail system that compliments it’s service. I think we can expect them to do something about this in late 2020 or early 2021, when those free grace period start to end and customers begin to leave or decide to stay.
So back to my original thesis; did Disney have a plan? Why else would Disney have a 100 billion assessment of Disney Plus?
It’s a red-herring to bring in the investment, because right now, for the grace period, they have a large subscriber count. The investment money comes in. They spend it on more movie and series productions. The products get deployed on the streaming service. The subscribers stay. The monthly service fees are maintained and the stagnation peak of the customer base is put off further into the future.
Oh, Disney has a plan, it just wasn’t what you thought. They want everyone and everything.