Disney: synergies and monetization in the enchanted kingdom

Distribution agreements, synergies between services and technical tests: Disney has put all the odds on its side to ensure the success of Disney +, its video streaming platform that will be in direct competition with the industry leader, Netflix, from 12 November in the United States.

“We are confident that we are ready for a large-scale launch,” group boss Bob Iger told analysts on Thursday after the publication of better-than-expected quarterly results on the stock market.

Disney + will be available from $ 6.99 a month, a price much lower than that of Netflix, and will offer an impressive catalog, with 500 films (collections “Star Wars”, Pixar, Marvel …) and 7500 episodes of series, including the 30 seasons of the “Simpson”.

The platform of the enchanted kingdom will begin expansion by Canada, the Netherlands, Australia and New Zealand this month, followed by Europeans (including France, Germany, the United Kingdom, Canada, Italy, Spain …) on March 31, 2020.

The group hopes to attract between 60 and 90 million subscribers by 2024. It will compete with Netflix (nearly 160 million subscribers), Amazon Prime Video, Apple TV + (online for a week), and soon Peacock (NBCUniversal) and HBO Max (WarnerMedia).

– Monetization –

Bob Iger announced that he has entered into a distribution agreement with Amazon for Disney + to appear on “Fire TV” TVs. “We have agreements with Apple, Samsung, Microsoft, LG and Google, so we have made significant progress in terms of distribution agreements, and Amazon is the last of them,” he said. American channel CNBC.

He added that the Hulu platform, which Disney has taken control of, will soon be offering 21 Century Fox (21 CF) programs, bought in December 2017. In the United States, the band will also offer Disney D23 members subscribe simultaneously to Disney +, Hulu and ESPN + (sports) for $ 12.99.

The Enchanted Realm group is strengthening the synergies between these multiple assets to ensure the success of its new service, which Bob Iger considers the most important product launched by the group for nearly 15 years now.

The CEO explained that he does not consider the various applications (Hulu, ESPN +) or Fox as separate entities, but as actors in a broader set of “production, creativity, distribution and monetization”, with the possibility, through for example, to broadcast films in the cinema, then on television and on the platforms.

“It's an amazing way to reach more consumers and generate revenue,” he said. “This gives us a competitive advantage over our competitors who do not have as many windows of distribution or ways to monetize their content.”

– “Beyond children” –

Disney plans to have the same approach with ESPN and sports rights, including broadcasting more sports on its ABC channel, “because the value of live sports competitions on traditional channels is increasing”.

Bob Iger was also pleased with the tests on Disney + in the Netherlands this weekend. “The platform and robust and all the elements are in place to manage the scaling up,” he promised.

“We have found that the demographic range of our audiences is broader than what people expect, it goes well beyond children and families,” he added. “All brands have attracted interest, that's good news.”

In addition to historical catalogs, Disney + will offer 10 original films and series, including The Mandalorian, the new Star Wars series from Lucasfilm. The company promises 620 films and more than 10,000 series episodes in 5 years.

Disney earned $ 19.1 billion in revenue in the fourth quarter of its lagged year (+ 34%) for earnings per share of $ 1.07, outperforming analysts' expectations.

For the full year, it posted sales of $ 69.57 billion, up 17%. These strong increases can be explained in particular by the integration of 21 CF.

The title Disney took more than 5% on the stock exchange during electronic exchanges after the closure of Wall Street.


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