In media, specifically in-home entertainment, there are the subscriptions — and then there are the extras on top of the subscriptions. Then there are the ancillary revenue streams on top of the extras on top of the subscriptions. Call it the meta version of contextual commerce.
Not all that long ago, media firms, Disney among them, were trial-and-erroring their way to new offerings amid the pandemic, calibrating how movies should be released. No doubt you’re familiar with the drill — having seen “Hamilton,” “Mulan” and other offerings come direct-to-channel, or in some cases, directly to channel and in theaters.
In one seismic example, and as noted in this space earlier in the month, the Warner Bros. movie studio announced it will send 17 films — including expected blockbusters like the “The Matrix 4,” “The Suicide Squad” and “Dune” — to its streaming service, HBO Max, on the same day they hit brick-and-mortar theaters.
And in even more recent news, Disney+ is bringing out a slew of new content, with 20 new Star Wars and Marvel series on the horizon, and with at least some films coming to theaters and streaming on the same day.
All it takes is a bit extra money. As CNET reported, “Raya and the Last Dragon” will be available on Plus in March, same day as theaters — available to subscribers, with an additional fee (“Mulan” had been available, for example, for an additional $30). The films are being released via the Disney Premier Access service, which allows users to download and watch films (for the life of their subscription), for a one-time fee, typically roughly $30.
The numbers bear out that the pivot has legs.
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For Disney, the wholesale push into streaming was formalized in October, and has gotten increased traction even as, quite naturally, the flagship parks busines has faced struggles as foot traffic declined.
At the same Investor Day event on Thursday (Dec. 10) detailing the movie and series slate Disney said its Plus offering has 86.8 million subscribers. That’s up from the 73 million it had at the end of the fiscal fourth quarter. Beyond those numbers, the company’s portfolio of direct-to-consumer services has 11.5 million ESPN+ subscribers and 38.8 million Hulu subscribers. Disney expects its streaming services to hit 300 million to 350 million total subscriptions by fiscal 2024. Direct-to-consumer revenues soared by more than 40 percent in the latest quarterly report, to $4.9 billion. while the studio division, which includes theater releases, saw revenues decrease by 52 percent to $1.6 billion.
Add those eyeballs all up in the home setting, and it’s clear that the dedicated audience in place that would consume content is greater than might be seen with a staggered slate of in-theater releases.
By keeping the Star Wars and Marvel franchises rolling and active, through next year and beyond, through series in particular, the opportunity exists for increased merchandise, yes, but also add-ons at the theme parks, such as rides and other attractions.
Disney has also announced that it is offering a bundle for its streaming services. The company said it will offer Disney Plus, an ad-free version of Hulu, and ESPN+ for $18.99. The Verge noted that this is a $6 increase over the company’s existing $12.99 streaming bundle (which only offers a version of Hulu with ads).
The bundling effort is reminiscent of what’s been seen with Apple (via Apple One), in a bid to boost subscription numbers.
In a recent panel discussion on the subscription economy, Recurly CEO Dan Burkhart said, “In many ways, COVID-19 has accelerated us to the future, because the notion of convenience and some of these other aspects of subscriptions that have been appealing to subscribers have only been accelerated now that they are reconsidering the true cost of going to the store or the mall, browsing aisles and racks, finding something they like and then bringing it home.”
That included media, of course, where we note that the $30 one-off price for, say, a Disney movie, the latest Star Wars blockbuster, perhaps, is still less than would be ponied up bringing a family of four to the theater. Then there are the additional revenue streams to be realized from shirts and mugs and games … and eventually, theme park visits. For now, of course, home is the way to go. Vaccines are coming. But still. As PYMNTS’ data show, 58 percent of U.S. consumers have said that it would take a vaccine being out in wide circulation before they would feel safe going back out into the world and resuming their old habits. That would include movies and theme parks. For Disney, the cross-pollination of movies, media, merchandise and more will simply prime the pump for a holistic experience for all things Marvel and Skywalker.
Starting with streaming on demand (for a price, naturally) — direct to device, and where the couch offers a homier (and safer) alternative to the cineplex.
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