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Disney+ launch: industry reaction

24 Mar 2020  |  Mediatel News Staff 
Disney+ launch: industry reaction

Disney has today launched its subscription streaming service in the UK at £5.99 a month. Here, industry experts comment on the addition of another SVoD service to the market

Martin Radford, director of media, Ebiquity

“Difficult to see. Always in motion is the future,” said Yoda.

Disney+ launch plans were made at a very different time. An ad-free platform which many will see as offering a superior library to Netflix should be a huge draw to UK households where streaming services penetration is about 60% of US levels. There, 3 months after launching, it has 28.6m subscribers, 3.6m ahead of Wall Street expectations. It is cheaper than Netflix, a vast array of films (Star Wars, Marvel, Pixar etc.) and TV series (The Simpsons, High School Musical) have pulling power alongside more flexible account sharing. Its core audience should be younger, family types - ideal data fountains to constantly be pushed the Disney brand. UK Google searches are on the rise.

Fast forward to today’s turmoil, the world is very different but uptake should be swift. It’s a natural babysitter (with perfect timing) and will work well as a first or additional service. Pressures in the economy will force many to rationalise options and look at others first.

To infinity and beyond? Not quite, but there will be others more fearful of hearing the sound of the Imperial March.

Louise Whitcombe, head of customer engagement, Ogilvy

We will likely see hyper-fragmentation; traditional, dominant suppliers risk a customer churn driven by the rise in the choice of services and economic uncertainty.

Customers will consider the value they receive from their satellite TV supplier, providing opportunity for niche specialist streaming services and streamed gaming services like Twitch and YouTube.

The fact that production of new content will slow down provides an opportunity for Disney+; its huge, pre-existing content libraries alleviate the need to rely heavily on producing new shows.

Partnerships with tech suppliers already in-home and a sympathetic pricing strategy for market entry will support the launch, but Disney+ also need to consider the current landscape; balancing empathetic pricing with customer needs based messaging and frictionless setup will be the key to success.

It’s a perfect opportunity - the only real blocker is Disney itself – will they be able to resource a launch in such turbulent times?

Mark Wilson, associate vice president, Analytic Partners

Yes, Disney+ is going to have a captive market right now with everyone at home – even before the coronavirus about 30% were considering it according to WARC – and we can easily predict a big uptake in subscriptions, but so do all other TV channels. Linear TV ratings are through the roof due to the rolling new content and constant government broadcasts.

What could have a big impact on Disney+ is that people’s media consumption patterns might shift even more towards digital during this time and might make it hard for them to go back to linear TV or choose it over their paid on-demand entertainment.

Rebecca Sentance, deputy editor at Econsultancy

Coronavirus may benefit Disney+ – but let’s not forget about the challenges.

There’s been a distinct uptick in excitement around the already highly-anticipated UK launch of Disney+ on 24th March. Demand for online content of every kind has soared due to the coronavirus crisis, as largely housebound consumers search for something to entertain themselves. While it is difficult to call anything a silver lining in such a fraught and uncertain time, it does seem like the current climate will work in Disney’s favour, particularly with its competitive pricing.

However, we mustn’t forget that the current environment also presents unique challenges for streaming companies: Netflix has pledged to reduce its bit rates in Europe to ease the strain on already stressed networks as the majority of the populace is now working and accessing services from home. On its US launch last year, Disney+ crashed due to overwhelming demand; if the same thing happens in the UK, those consumers who haven’t already committed may decide to give it a miss – after all, they have plenty of other options to choose from.

Joe Wood, strategy director, Spark Foundry

As we enter a period where people are likely to be spending more time at home, a new entrant into the subscription video on demand (SVoD) market may be welcomed with open arms.

That said, 2020 will not be without its challenges for SVoD providers, as data suggests consumers are reaching a point of ‘subscription saturation’. Which poses the question; are UK consumers going to be ready to subscribe to another SVoD service?

The recent closure of schools seems to have prompted a surge of parents to ‘pre-order’ the service, conscious of the impending demand to distract young children. Disney+’s entry into the market will almost certainly be helped by the nature of the content that will feature on the platform. The brand’s affinity with the optimistic, the aspirational and the simply feel-good, may prove itself to be the perfect tonic for the uncertain, anxious time we find ourselves in.

Amy Jackson, business director, Incubeta

As two-third of internet users between the ages of 16-64 now consume TV over a subscription on demand (SVOD) or television on demand (TVOD) platform, people are spoiled for choice when it comes to choosing the services they want to sign up to. While things are changing rapidly with Covid-19 in the UK, the prime audience for Disney+ is currently still in school. Yet, if this was to change then Disney+ could potentially see a rush of sign-ups as parents struggle to keep their children entertained at home.

The channel is already viewed positively, as it announced a discount to its yearly subscription prior to launch in Europe. Hopefully it will be a service that will provide much entertainment and a safe space from the current doom and gloom we are seeing in the media.

Vincent Soucaret, head of video advisory, Xandr

TV has always been a highly engaging medium and connected TV (CTV) is no different. Viewers are consuming more video on demand content than ever before, and this is only set to increase with the launch of new services like Disney+, making CTV a device of choice for consumption around the world.

While this contributes to the fragmented viewership we’re seeing, it provides high quality inventory in an inherently viewable and brand safe environment and gives digital video advertisers the unique opportunity to reach audiences on the large screen of the TV.

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27 May 2020 

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