The arrival of Disney+ on the OTT streaming stage could have long-term implications for the home cinema market, but it’s not Netflix or Amazon Prime Video that should be worried.
After its server-buckling launch in the U.S. last year, Disney+ has finally landed in Europe, offering a mix of classic animation, superheroes, and space opera (plus some random Nat Geo documentaries), at a price that dramatically undercuts its streaming rivals.
With franchise-heavy attractions, it’s practically a theme park for binge watchers. Disney is even throwing in 4k Dolby Vision for no additional premium. The recipe has so far proved irresistible.
Even before its European launch, the service had amassed global subscriptions of 28.6 million after just a few short months. It’s banking on 60 to 90 million by the end of 2024.
“Our research shows that consumers who were once saying they want one to three OTT services are now saying that they're open to three to five,” Amy Jo Smith, President and CEO of DEG (Digital Entertainment Group), says.. “What we’re seeing is that the pie is getting a little bigger. You're going to see Peacock and HBO Max and Apple Plus, and they’re all going to have something different that they're offering to consumers.”
The pie may be growing, but sector domination is far from a slam dunk.
The nascent service’s biggest hurdle could well be its own content library.
That’s because Disney+ is unapologetically PG-rated. Upcoming attractions include a live-action remake of Lady and the Tramp; High School Musical: The Musical: The Series; and Forky Asks a Question. The only new show likely to generate interest amongst subscription paying adults is the Star Wars spin-off, The Mandalorian, at least until the Marvel heroes arrive.
This kid-friendly environment is already frustrating creatives. Hilary Duff, headlining a Lizzie McGuire reboot for the service, took to Instagram to petition Disney to run her show on Hulu instead, saying the family rating will “limit the realities of a 30-year-old's journey.”
Disney+ is also working with a much smaller programming budget. It spent just $1 billion on content in 2019. By way of contrast, Netflix splurged $15 billion over the same period. Amazon has allocated $1 billion to fund its Lord of The Rings show alone.
Everyone knows that keeping up with new arrivals on Netflix and Prime Video is a full-time job.
By way of contrast, the first Marvel Cinematic Universe series to land at Disney+ will be Falcon and the Winter Soldier, due August 2020. Then it’s a four-month wait until WandaVision. Somewhere in between, we’ll get The Mandalorian Series 2. Hardly a glut.
Few could have predicted that Disney+ would throttle its own launch.
Admittedly, there’s no shortage of library content. The service boasts more than 500 movie titles and 350 TV series. This includes 30 seasons of The Simpsons, totalling some 600 episodes. You might want to start on these early, as Season 31 lands on the service in November.
Regardless of where Disney+ eventually ranks alongside its two main rivals, its executive Mouseketeers have committed long-term to a streaming future. This platform is almost certainly too big to fail. And that’s why I believe the real casualty of Disney+ will not be Netflix or Amazon but Blu-ray, specifically UHD Blu-ray.
The 4k disc format relies almost exclusively on blockbuster hits for market growth. The trouble is those same films — the Star Wars and Marvel movies — are exactly the same titles which will be on tap in Disney+.
Will buyers continue to invest in blockbuster titles on disc when they’re also available to stream in 4k Dolby Vision on Disney+? I think not.
I reckon this mousetrap could herald the end of physical media — and that should send a shiver down the spine of every technology integrator.
But there is a caveat: Few could have predicted that Disney+ would throttle its own launch, reducing bandwidth by a quarter, diminishing image quality and junking Dolby Atmos altogether.
The move, ostensibly to reduce internet traffic congestion caused by the lockdown during the COVID-19 pandemic, dramatically reduces the appeal of Disney+ as a home cinema source amongst discerning cinephiles.
The mouse has inadvertently handed the silver disc an unexpected reprieve. It remains to be seen if it’s short lived.
This article originally appeared in the Q2 2020 issue of Communicates, which you can find here.