The Challenging Question Disney Faces with Streaming
Here’s a question.
Why should Disney spend $180 million on The Acolyte when fans will simply watch Family Guy reruns instead?
This is the challenge for Disney when it determines its streaming budget.
Throughout Hollywood, studios are contending with an existential debate regarding survival.
Wall Street Journal
It stems from the escalating cost of production and the declining profit of conventional revenue streams.
The latest set of Nielsen ratings provides multiple glaring examples of why this conversation lacks one true answer.
Photographer: Pavlo Gonchar/SOPA Images/LightRocket/Getty Images
Let’s discuss the challenging question Disney faces with streaming.
The Rising Cost of Taking a Chance
I swear this won’t be a “pick on The Acolyte” article, as I always admire when a studio takes a risk on a project.
Plus, I love several members of The Acolyte’s cast, especially Carrie-Anne Moss and Manny Jacinto.
Photo: Star Wars
Still, nobody who has read the last few weeks of articles should have been surprised by this week’s announcement.
Disney has cancelled The Acolyte after just eight episodes.
Photo: Star Wars
Thankfully, the way modern television works, eight episodes means an entire season, so nobody was cliffhung.
Disney spent $22.5 million per episode for a show that simply wasn’t popular, especially by the lofty standards of the Star Wars franchise.
Meanwhile, Family Guy, which isn’t airing new episodes right now, claimed 1.032 billion viewer minutes.
We don’t know The Acolyte’s official number, but it was under 340 million viewer minutes, probably substantially less.
Master Sol (Lee Jung-jae) in Lucasfilm’s THE ACOLYTE, exclusively on Disney+. ©2024 Lucasfilm Ltd. & TM. All Rights Reserved.
This example isn’t the best one, because Family Guy will air new episodes this fall, which means Disney’s still paying for this content.
However, Disney mitigates the cost by licensing the episodes to air on Fox.
Glass Houses
Photo:nbjobs.ca
Therein lies the math of this complex situation.
Any time there is new content, someone must foot the bill.
And Hollywood accountants are notorious penny pinchers who cannot stand the thought of losing money on anything.
In fact, the business model relies on earning exponents of profit per investment.
Photo: Pexel.com
The Acolyte joins previous programs like Secret Invasion in falling well short of its financial goals. So, what’s the answer?
Should Disney stop airing new episodes of Star Wars and Marvel content? Obviously not.
(Photo by Lisa Kyle/Bloomberg via Getty Images)
The Nelson Peltzes of the world will tell you that Disney should only make hits.
This seems like a good time to mention that Peltz’s daughter Nicola has costarred in financial duds like The Last Airbender and Transformers: Age of Extinction.
Photo: restorethemagic.com
That’s kind of a glass houses comment, but it speaks to a larger point.
Everyone says, “ha ha, they shouldn’t have done that,” but the people with consistent track records of financial profitability are few and far between, especially on streaming.
Nelson Peltz
To wit, here’s an archived Puck article showing how much streaming services lost by signing big money deals with people like… Seth MacFarlane of Family Guy.
About the Ratings
Families Streaming Disney+
Perhaps the best way to understand this quagmire is to discuss this week’s ratings, where Disney, as usual, places several titles in the top ten.
You’ll notice that headlines have turned around on Disney streaming recently, because the company is performing well.
Photo: Disney
The obvious success story remains Bluey, which finished second overall in streaming with $1.064 billion viewer minutes.
Bluey, which aired no new episodes during the applicable time frame of July 22nd through July 28th, beat Cobra Kai, which aired the first set of episodes from its climactic season.
Photo: Bluey
Apparently Bluey is a proponent of the mantra, “Mercy is for the weak.”
The fact that I’m saying this speaks volumes about what’s happening.
Photo: Disney
Bluey reruns beat expensive new episodes of one of Netflix’s hottest properties.
Logically, that makes no sense, but here we are.
Family Guy
Similarly, Family Guy’s 1.032 billion effectively matches House of the Dragon’s 1.039 billion viewer minutes.
Guess which one cost more… by about $160 million?
House of Dragon
Should Max not have aired new episodes of House of the Dragon?
Apparently they weren’t even sure, since they announced the show’s end date and reduced the budget for seasons three and four.
House of Dragon
When the check arrives at the dinner table, nobody wants to foot the bill.
Disney Streaming by the Numbers
Photo: IGN.com
This conversation doesn’t have clear-cut answers, though.
No reasonable person would say Hulu should cancel The Bear.
Photo: Variety
The critically acclaimed series has become a bona fide ratings draw, earning 427 million viewer minutes for the week in question.
This happened several weeks after the entire season had dropped on Hulu.
Photo: English Jargon
People kept watching. Along those lines, season four of Only Murders in the Building debuts on August 27th.
I’m optimistic that this season will be its best yet for streaming ratings.
However, one glance at the Acquired chart shows that Disney doesn’t really need to pay for new content right now.
Credit: Freeform
In addition to Bluey and Family Guy, three other series earned placement on the charts.
Grey’s Anatomy claimed 923 million viewer minutes, while Criminal Minds managed 750 million minutes, and Bob’s Burgers held steady at 708 million minutes.
Photo:cnet.com
At this point, I’m surprised when any of those shows aren’t listed on the streaming charts.
Similarly, you know by now that Moana holds a near-constant place on the movies chart. For this week, it garnered another 243 million viewer minutes.
Photo: Playbuzz.com
Does this mean Disney shouldn’t produce movies exclusively for its streaming services? Again, no.
As our own Allison Fricker just told you, Descendants: The Rise of Red recently became Disney’s most successful multi-platform release to date.
Disney+
While I mentioned last week that it hadn’t held as well as I’d hoped, it’s still the most watched Disney Channel original movie ever to stream on Disney+.
So, Disney made a sound business decision in greenlighting that project.
The Disney flywheel still works.
What’s the Answer to Streaming’s Challenging Question?
Photo: TechCrunch
People grow violently angry when I say this, but it’s true.
The reality is that companies need a nice mix of new content and popular catalog titles.
Image: The Wall Street Journal
Realistically, Disney cannot afford to create new content like Descendants: The Rise of Red, The Bear, and The Acolyte simultaneously each week.
Instead, the company’s strategy of gradually spreading out its top content throughout the annual calendar works quite well.
FOX
This tactic blends perfectly with Disney’s acquisition of the Fox assets such as…Family Guy and Bob’s Burgers.
I’m not looking to pick a fight, but all the critics spending the last few years swearing this would never happen have gone oddly quiet.
Photo: ESPN
Those of us saying to be patient weren’t saying the fun thing. We were saying the right thing, though.
Disney’s winning at streaming, y’all.
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