Disney Major Announcements Q4 2017
Disney ended their fiscal year by reporting their annual earnings on Thursday, November 9th. The announcement included a conference call with Bob Iger, the CEO of The Walt Disney Company. If you believe the rumors, Iger is currently contemplating a run for President of the United States in 2020. Before he leaves Disney, his employer since 1996, Iger wants to leave a final, indelible imprint on the company. And his conference call shows that he has a firm vision for his last days as CEO of Disney, a job that ends in the spring of 2019 (which seems too late for Iger to run for President, but that’s just one man’s opinion). Here are the huge announcements for Iger’s conference call about the future of Disney.
So. Much. TV.
The most shocking announcement is that the new ESPN streaming service will be called ESPN Plus. Yes, I’m joking. The sad thing here is that Disney probably spent hundreds if not thousands of man-hours on researching and polling before coming up with the most obvious name possible. But I digress.
ESPN Plus isn’t that far away. The current plan is for widespread availability in the spring of 2018. That’s about six months from now. According to Iger, “This one app [will offer] sports fans far more than they can get on any other app, website or channel.”
He also adds, “The product will be accessible through a new and fully redesigned ESPN app, which will allow users to access sports scores and highlights, stream our channels on an authenticated basis and subscribe to ESPN+ for additional sports coverage, including thousands of live sporting events.” Odds are good that you already have downloaded the app that will evolve into ESPN Plus!
Disney also revealed that ESPN Plus will be cheaper than Netflix since it won’t have as much content. Analysts including myself suspect that Disney will have a subscription pricing model combined with a per-event option. Sports fans with a vested interest in only one team or event should be able to opt out of a monthly fee in favor of single event purchases. That’s actually a more lucrative business strategy for Disney, as it entices non-subscribers to buy Disney products on occasion.
Even. More. TV.
Moving forward, the most important media property for The Walt Disney Company is their previously announced streaming service. Three months ago, this announcement was a huge shocker to many industry insiders. During the media call, Iger unveiled additional details about the service.
The most important announcement involved the price. Since the service won’t debut until 2019, Disney’s obviously not ready to state the monthly fee. What Iger did mention is that the price will be lower than that of Netflix’s service. This isn’t a surprise inasmuch as confirmation of a common sense aspect of the project. Netflix has more than 100 million subscribers, which means that one out of every 76 people on this planet uses their service.
To compete with Netflix, Disney has to price their service lower, at least at first. Over time, they can approach Netflix’s price as long as consumers deem the two streaming channels as comparable in quality. Until then, Disney’s got a mountain to climb.
Content Is King
Iger understands the obstacles that the new Disney property faces. He’s also giving it every opportunity possible to succeed. Several of the new details about the service underscored this point. All of Disney’s major properties will have content available on the fledgling streaming channel. Whether you like Marvel, Pixar, Star Wars, or plain ole Disney, you’ve have a wealth of content.
Disney’s service promises several new programs plus access to the already-deep Disney library. New programming will include a Marvel television series created especially for the new channel. This news raised some eyebrows, as Disney’s Marvel programming has anchored Netflix’s lineup of original content over the past few years. Shows like Daredevil and Jessica Jones had a home on Netflix and will apparently remain there, but there are hundreds of Marvel characters. Disney plans to mine that deep roster to create a new show exclusive to the channel.
The Marvel proclamation isn’t shocking, but the next two announcements definitely qualify. Iger confirmed that a live-action Star Wars series should be ready in time for the new service. Similarly, an animated series based on Monsters, Inc. is also in development. Yes, Mike and Sully get their own television show! The other revelation isn’t as impactful today, but it would have seemed huge ten years ago. A High School Musical television series is in the offing. I’m of the opinion that we already had one, and it was called Glee, but I guess Disney won’t let a cheap knockoff deter them.
Iger went on to note that all major Disney motion pictures will appear on the channel “in the first pay window,” which means a few months to a year after they appear on home video. Similarly, Disney will create four or five original movies annually, with them exhibited exclusively on the streaming service. Clearly, Disney wants their new channel to be competitive with Netflix from day one, and they’re quietly working behind the scenes to make that seemingly impossible goal a reality.
The Force Continues
Speaking of Star Wars, Iger confirmed what everybody knows. The franchise’s original purchase price of $4 billion was comically low. Disney’s earned revenue beyond its loftiest expectations thus far, and they’ve only scratched the surface.
As a way to strike while the iron is hot, Disney has authorized another movie trilogy. This one won’t use the established characters in the Star Wars universe, at least not the ones with Skywalker in their name or blood. Rian Johnson, the director of Star Wars: The Last Jedi, will function as caretaker for the entire project. This showing of faith indicates that the upcoming Star Wars movie is probably pretty good.
Disney didn’t show their hand for Pandora – The World of Avatar until a few months prior to its opening. As such, we shouldn’t feel surprised that Iger was similarly cagey about the ongoing work at the various theme parks. He did confirm some dates, though.
Toy Story Land is on schedule to open in the spring of 2018 at both Disney’s Hollywood Studios and Shanghai Disneyland. More importantly, the two major Star Wars Land projects are still on schedule despite reports to the contrary. Iger expects both to open in 2019 as originally rumored/semi-confirmed.
The Disney CEO adds the following, which you can take however you want: “We’re also adding new attractions in hotels and our resorts around the world along with cutting-edge technology to enhance the guest experience.” To me, that’s a strong hint about Star Wars Hotel’s revolutionary interactivity, but your mileage may vary.
I’m going to leave you with one final quote from Bob Iger. He was queried once again about the pricing structure of the new streaming service as well as potential customer numbers at the start. I found the response fascinating, and I think you will as well.
“It is our goal to attract as many subs as possible as starting out. We think we’ve got some interesting opportunities there given the affinity to Disney, whether it’s with our Disney-branded credit cardholders, our annual pass holders, people who are members of D23, people who own Vacation Club units at Disney, people who visit our parks frequently. There’s a gigantic potential Disney customer base out there that we’re going to seek to attract with pricing that is commensurate with or that balances the quality of the brands and franchises that are in there, but also takes into account the volume. And that will give us an opportunity to grow in volume and to have the pricing over time reflect the added volume as this product ages.”
My idle speculation is that Disney plans to offer discounts and incentives to its loyal customers during the first year of the streaming channel in order to boost subscriber numbers. And if you’re reading this blog, you’re probably someone who qualifies as a Disney credit card holder or annual pass owner or the like. So, that’s potentially GREAT news to you. If this breaks right, the massive Disney library could be open to you in 2019 and at a much better rate than you’re expecting.