Disney+ Reveals the Future of Streaming — It’s Television
When The Walt Disney Company confirmed plans to introduce Disney+, nobody was quite sure what to expect.
I’m including Disney when I say that, as the team responsible for the product had simple instructions.
The idea was, “Do whatever Netflix is doing…but with Disney stuff.”
Obviously, the plans were nebulous at best, but here we stand four and a half years later.
Disney+ has quantifiably succeeded beyond anyone’s wildest dreams, at least in terms of subscriber numbers.
While the service hasn’t turned a quarterly profit yet, the expectation is that this will happen soon.
Still, Disney’s streaming offering has experienced its fair share of tumult, with a couple of problems that persist to this day.
Now, executives believe that they have finally cracked the problem.
Due to a report from The Information and a non-denial from Disney itself, we can anticipate what happens next.
Disney has revealed the future of its streaming service: It’s television.
The Streaming Conundrum
According to The Information as covered by Yahoo!, Disney+ may change its front page look to make it appear a bit familiar.
Before I explain what that is, let’s talk about the reason why Disney+ needs to make a change.
Currently, streaming services fear a subscription metric known as churn.
Consumers churn through streaming services by canceling them.
Let’s say that you purchased Disney+ to watch Taylor Swift | The Eras Tour.
After you watched the film five or six times, you probably checked out other content on Disney+.
Once you felt you’d seen everything that interested you, that’s when you canceled your service.
This customer behavior happens frequently in the streaming industry, as it’s a logical outcome of so much competition.
Right now, consumers have their choice of Amazon Prime Video, Max, Peacock, Disney+, Hulu, Netflix, and several others.
Savvy subscribers have figured out how to cycle between these services, watching all the new content and then moving on.
Each time you cancel a service, you’ve increased that business’ churn rate.
Once that number grows to an alarming percentage, the service often offers discounts to lure in more subscribers.
The game within a game is to keep people from canceling in the first place, and that has grown more challenging in 2024.
In addition to the competition, streaming services are also lacking new content due to the 2023 Hollywood strikes.
In Disney’s case, several Marvel and Star Wars programs suffered delays, which explains why Disney+ acquired the Taylor Swift concert film.
The service needed something to entice potential customers at a time when Disney+ was lacking original content.
Preferably, the subscribers would watch the massive content library available on Disney+.
Alas, that has proven challenging due to analysis paralysis aka too much choice.
Freedom of Choice
We all know the debate of, “I dunno. What do you wanna watch?”
I’m old enough to remember those conversations at Blockbuster, and they definitely transitioned to Netflix as well.
In the case of Disney+, you could watch virtually anything in the company’s storied history.
We are talking about 100 YEARS of content! So, when you debate what to watch, it often feels a bit overwhelming.
Disney+ anticipated this issue from the beginning, which explains its clever setup.
When you load the app, you’ll notice tiles at the top. These tiles highlight core brands like Marvel, Star Wars, Pixar, and National Geographic.
Obviously, there’s also the basic Disney tile for all the classic animated movies from our childhood.
Recently, Disney added another tile for Hulu, and that’s part of the explanation for an impending change.
When Hulu became a built-in part of the Disney+ app, the anchor service added an estimated 40,000 hours of content.
That was on top of the already-robust library on Disney+.
Who wants to filter through all that to decide what to watch?
When Disney designed the user interface, the developers had no idea that Hulu would eventually integrate into the service.
In short, an already overwhelming app became labyrinthine.
I’m a tech evangelist, an early adopter, and someone who co-hosts a streaming podcast.
When I pull up Disney+, I often just lazily press play on a Futurama episode. It’s easier than searching for something new.
Well, Disney pays a lot of money for that new stuff and wrote a $71.9 billion check for the old stuff.
In a perfect world, nobody would ever cancel Disney+ and/or Hulu because there’s always something unwatched to discover.
But people still do cancel. That’s the behavior Disney must stop…or at least slow.
The Future of Streaming Looks Familiar
In 2013, long before Disney purchased Fox, the latter company lost its licensing rights to international soccer events.
Fox owned a cable channel but lacked content for that service.
The company cleverly pivoted from Fox Soccer to a new channel you probably know. Its name is FXX.
Since Fox didn’t want to spend more money on what was already a flagging service, the programmers improvised.
FXX started showing syndicated Fox programs like The Simpsons, Family Guy, and Archer.
Remarkably, the licensing for this proved messy. FXX had to budget $750 million for The Simpsons alone.
Since the money moved internally at Fox, it wasn’t a conventional transaction. More importantly, it was a weird gambit, one that worked.
People like me would turn on FXX and leave it on, knowing we’d have programming we liked for the next few hours.
Soon afterward, a fledgling startup in the streaming industry watched what FXX had done and adopted it.
Both companies realized the importance of familiarity with regard to consumer behavior.
An entire generation of consumers had learned to watch a cable service’s internal programming guide channel to see what was on.
Those listings became the baseline for the viewer interface for the startup, Pluto TV.
A person would load the app and see content like Gunsmoke, Baywatch, Star Trek, and other franchises with loyal viewers.
They’d select the appropriate channel, and it would serve them an endless supply of the franchise in question.
In short, Pluto TV reinvented the core concept of FXX as a streaming service.
Ten years later, Disney+ is gonna totally rip off that idea. Yes, I’m serious.
Streaming Is the New Television
Currently, Disney+ has fallen behind some competitors in an essential metric.
People don’t stay on Disney+ as long as other streaming apps.
In simplest terms, many consumers specifically turn on Disney+ to watch a single program. Once that’s done, they close the app.
Disney officials do NOT want you to close that app. When you do that, you’re demonstrating that you’d be fine without Disney+.
Instead, the company wants to get you so addicted to Disney+ that you cannot turn it off.
When customers feel that way, they won’t blink twice at a price increase.
Also, nobody will complain when Disney displays more ads during the programs.
As a reminder, showing commercials during program breaks is how the entire television industry operated for 75 years.
Currently, Disney+ also lags behind others in the industry in the all-important metric of average revenue per user (ARPU).
By serving more ads to more engaged viewers who watch more content…well, the math here is self-explanatory.
So, Disney+ boosts its ARPU significantly by getting people to stay on the app longer.
Reportedly, Disney intends to adopt this Pluto TV interface wherein you can do a deeper dive on the current tiles.
Let’s say that you pull up the Star Wars channel. Bam! The Holy Trilogy starts playing.
Similarly, you could watch The Mandalorian channel until Baby Yoda grows so much he’s Old Yoda.
Similarly, a Marvel animation channel would show everything from X-Men: The Animated Series to X-Men ’97.
Disney+ would remove some of your paralysis analysis by showing you specific options via channel scroll.
A Better Kind of Television
You may wonder why you’d like this as a consumer, and that’s challenging to describe to those unfamiliar with FXX and Pluto TV.
The gist is that when you load the Disney+ app, you’d encounter dozens of deep-dive options.
You’d find exclusive channels dedicated to The Simpsons, Futurama, Boy Meets World, Lizzie McGuire, Hannah Montana, and so forth.
Disney+ could seed its app with classics like The Mickey Mouse Club and Mickey Mouse cartoons.
Then, the service would contrast those older titles with Recent Disney Releases, Disney Sports Movies, Disney Holiday Classics, and the like.
These specific recommendations would trigger you to think, “Oh, that’d be good,” or “Meh, I’m not in the mood.”
Currently, Netflix does something similar each time you load the app. A complex algorithm determines your preferred content.
Netflix recommends the things its system believes cater to your preferences.
In lieu of that, Netflix offers a generic Play Something button that fully removes your choice. You’re telling Netflix to show you anything.
What Disney intends is closer to the analog cable listings screens of old.
Everything you’ve ever watched on Disney Channel from Duck Tales to Kim Possible to Bunk’d would have its own listing.
You’d simply choose the one that best suits your mood. In the process, Disney+ would ensure two things.
The first is that you’re a satisfied customer unlikely to close the app anytime soon, which will help Disney’s ad revenue.
The second is that you’re unlikely to cancel Disney+ since it offers familiar content you like, a kind of media comfort food.
Frankly, this idea makes so much sense that I’ll be stunned if Disney doesn’t do it.
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