One of the biggest changes has been in Disney’s entertainment. Last year, Disney even reorganized part of its businesses to make streaming the primary focus of its entertainment. Disney is also investing LOTS into Disney+. As Disney continues to adapt and evolve, and the situation with the pandemic and its parks develops, we’re left to wonder…is Disney+ the future of for the Walt Disney Company?
Suffice to say, 2020 was a surprising, challenging, and difficult year. With many pandemic-related restrictions and necessary pivots, Disney World has had to navigate its way through unprecedented times.
The parks adapted by getting crafty with line queues and increasing capacity when possible. Disney’s merchandise team churned out collectible gotta-have-‘em face masks and has given some guests the chance to get some amazing discounts.
But, the Company is still facing a lot of challenges. Disney has canceled many of its Adventures by Disney vacations. Disney Cruise Line has also continuously canceled more and more of its upcoming sailings. Disneyland Resort in California is expected to stay closed through March. Disneyland Paris is still closed. And even Disney’s parks around the world that are open are operating at reduced capacities.
But, according to one analyst, even though things might not have gone fantastically with those parts of Disney’s businesses in the first quarter of its 2021 fiscal year, it might be okay because investors “have their eye on the prize.” Enter: Disney+.
Ahead of Disney’s last quarterly earnings call, one analyst said Disney+ numbers might matter more than the empire as a whole. The analyst shared that investors likely want to know how the streaming service has done in light of season 2 of The Mandalorian and the premiere of WandaVision.
Ever since Disney+ debuted, the streaming service has been a smash hit, racking up millions of subscribers, surpassing even Disney’s expectations for the service, and totally changing the way we Disney-lovers view some of our favorite movies and TV shows.
Disney+ combines exciting original content with nostalgic fanfare, cleverly showcasing both the old and new eras of Disney entertainment. And with lockdowns and travel restrictions, folks all over the world have really been able to stay connected with that Disney magic thanks to the streaming service.
Disney has made it clear that it’s increasingly shifting its focus to its streaming platforms, including Disney+. This change has placed the Company in the right position to capitalize on its old successes but also produce enough fresh content to keep Disney front-and-center in the media amidst trying times for theme parks. Just look at the mega success of The Mandalorian, a series that’s become a full-blown behemoth with merchandising, and has even inspired a slew of other Star Wars-related projects!
While some of Disney’s theme parks around the world are closed, Disney+ has been able to continue to gain subscribers and Disney’s streaming services overall have recently seen an increase in revenue. It seems Disney isn’t just treating this as just a resource for Disney fans. It’s become a focus for the Company in a big way and a way for the Company to reach WIDE audiences across the planet!
Analysts have even upgraded Disney’s stock based, in part, on their streaming success, as well as other factors. And in fact Disney’s stock has hit some extremely high levels over the past year.
The company has also used Disney+ to keep things going in fresh ways while dealing with the restrictions of the pandemic. In a world without “normal” movie theaters or where people may be hesitant still to leave their homes, Disney has dropped must-see movies like Mulan and Soul directly onto Disney+ (one for an additional fee, and one without). The Company will be doing that again by releasing Raya and the Last Dragon in theaters and Disney+ (for an additional fee).
During the holidays, when Soul was released, Disney+ even saw a BIG bump in downloads. Back in November of 2020, Disney’s CEO Bob Chapek said “It’s very clear to us that new content drives subscribers.” It seems Disney is very much aware of how important it is to not only get subscribers, but produce content that keeps them subscribed.
The most recent Investor Day conference, for instance, was basically the Super Bowl of Disney media, FILLED with jaw-dropping announcements for TONS of upcoming NEW series, movies, and spin-offs — many of which are headed directly to Disney+.
Seriously, it was difficult to keep up with the dizzying amount of news Disney dropped that day!
But all this new content isn’t cheap. Disney is preparing to spend DOUBLE what it originally anticipated on content development costs, and is projecting Disney+ to be profitable in Fiscal Year 2024. How? Well, achieving its goal of having between 230-260 MILLION paid subscribers should help! Other things that could push Disney+ to become profitable include the price increase that is coming soon, enticing new bundles becoming available, the use of Premier Access, and the expansion of the Disney+ service across the globe. Some analysts even estimate that Disney+ will reach $4 billion in revenue by as soon as 2022.
Nowadays, looking to the future with Disney isn’t just about new rides, new restaurants, and new hotels. Sure, there are LOTS of all of those things too — and Disney has said that they WILL continue to invest in their parks. But especially now with Disney+, the future of the Walt Disney Company is about so much more.
And Disney knows it too. If you listen to the call or read a transcript from the 2020 4th quarterly earnings call, you’ll hear (or see) JUST how many times Bob Chapek (the current Chief Executive Officer of The Walt Disney Company) and Christine McCarthy (the current Senior Executive Vice President and Chief Financial Officer) mentioned the words “direct to consumer,” “DTC,” and Disney+. Chapek specifically noted that “DTC business is key to the future growth of our company,” and talked about how Disney recently restructured their businesses because of that.
Chapek also said that the recent reorganization helps Disney better align themselves as they pivot “to a DTC-first business model.” Note that Chapek didn’t say it was a DTC-emphasized model or just a model where DTC is very important — it’s a DTC-first model. That speaks volumes as to where Disney’s primary focus really will be moving forward. Chapek also said he sees the DTC business as a “key driver of significant long-term value for [the] company.”
Streaming is SUCH a big focus that no semi-annual dividend for The Walt Disney Company was issued in January partially to make sure the Company is able to prioritize its investment in DTC content. Disney isn’t playing around here.
As Disney continues to navigate this new era of streaming AND theme parks, Disney+ has carved a path that’s rich with new ideas. And the revenue doesn’t just end with subscribers. Disney+ original shows and movies often get their own bunch of accompanying merchandise and other items — whether that’s a Baby Yoda toy or a cake inspired by WandaVision.
Disney World’s parks, resorts, and restaurants may be what many fans associate with the Company, but Disney+ might become a much bigger part of making the magic all possible in the future.
Join the DFB Newsletter to get all the breaking news right in your inbox! Click here to Subscribe!
What’s your favorite thing about Disney+? Let us know in the comments!