Walt Disney is undergoing an unexpected financial crisis, following their acquisition of 20th Century Fox (a rival studio) and the coronavirus pandemic shutting down their main sources of revenue: movies and theme parks. Just last year, the company had broken its own record and become the most profitable studio largely in part due to its hit Star Wars film Rise of Skywalker as well as the highest-grossing film of all time Avengers: Endgame.
The latter is part of their Marvel franchise of superhero films that power much of their box office revenue. However, one place where it is doing rather well is its newly launched Disney+ streaming service which hit 54.5 million subscribers as of May 4, nearly to the low end of management’s expected subscriber range for the end of 2024. Hulu, meanwhile, racked up 32 million subscribers between its SVOD and Live TV products as of the end of March.
Now, a new report by analyst Simon Murray who surveys Digital TV, suggests that the streaming service will be expected to reach 202 million subscribers by 2025. This is a shocking almost hundred million spike from the original prediction Murray had of 101 million and is all due to the current Coronavirus pandemic.
— Disney+ (@DisneyPlus) May 9, 2020
Disney’s Saving Grace
Disney’s parks in China and Japan were hit early in the COVID-19 pandemic, with shutdowns that impacted the company’s revenue over the last few months. Disney’s parks around the world, including its Disney World in Florida and Disneyland in California parks which were shut down later. Its cruise division also stopped running in mid-March because of the virus. The studio also can’t rely on its mega movies such as its Disney live-action movies, its Star Wars movies, animated studios like Pixar or their Marvel brand to save the day with production shut down on all fronts and cinemas barely open.
What’s interesting about Murray’s reveal is that he thinks Netflix won’t experience as big a growth spurt stating that Netflix will reach 258 million subscribers in the next five years. Currently, Netflix is the leading streaming brand in the world and has 182 subscribers currently. Additionally, Disney is also expected to edge out fellow streaming service Amazon Prime to become the second-biggest streaming service. It is clear that following the next five years, the battle will be between Netflix and Disney to become the biggest streaming platform in the world.
— Disney+ (@DisneyPlus) May 7, 2020
Netflix relies on many of its foreign and adult TV shows and films to gain its subscribers. Disney Plus, on the other hand, is a family brand and will thus rely on sister streaming service Hulu (also owned by Disney) to target adults while it produces franchise heavy shows beloved by people of all ages. It is aggressively targeting its Marvel fan base producing TV shows on popular characters from its billion-dollar superhero movies. These include WandaVision (based on a super-powered mutant witch Wanda), Ms. Marvel (based on Pakistani American superhero Kamala Khan), and Falcon & Winter Soldier (about two of Captain America’s friends turned Avengers).
All of these films will be set in the established Marvel Universe and tie into any future films, encouraging viewers to stream the show as passionately as they see the movies in theaters. Disney Plus clearly believes that its existing franchises are the way to go to expand its global reach. And with good reason, as there has been little interest in the streamer’s original film or TV series. Instead, the focus is on Marvel shows (more than ten of which are in development), Star Wars films, and shows (one of which, The Mandalorian has already done very well) to lure people into getting a subscription.
Furthermore, the service features a vast catalog of beloved childhood animated films ranging from The Little Mermaid to Toy Story, making it a must-have service for families.
Currently, the service is only available in America and select European countries. However, the service is set to launch in Latin America and other parts of the world by next year. This report, however, indicates that the streaming service may be getting ready to dominate the streaming world the way the company’s film division has already won the global box office.