When I originally gave Disney+ a test run a little over a year ago, following its launch, I wrote that “Disney+ is a Winner.” Then, when Disney announced this past February that Disney+ had already accumulated 28.6 million subscribers, I wrote “Now It’s Really Official: Disney+ is a Winner.”
So what to say after last week’s Disney Investor Day, where it was announced that Disney+ is now up to a staggering 86.8 million subscribers? How many different ways can you say something is a winner? What seems more relevant is that Disney+ is likely to keep on winning, for years to come, totally transforming the Walt Disney Company, the streaming market and the broader media and entertainment industries.
The key to this ongoing success is Disney’s intention to significantly ramp up its content spending. Disney announced that its content spending in fiscal year 2024 will rise to $8-9 billion, up from the previous forecast of mid $4 billion. Overall global direct-to-consumer content spending will rise to $14-$16 billion in fiscal year 2024. While initially tagged as a kids-oriented service, Disney+ is broadening its positioning, competing more aggressively for subscribers who don’t have kids. The higher content spend is also supporting a one dollar per month price increase in the U.S. starting in March, 2021.
The increased content spending will power total global subscriptions to 300-350 million in FY 2024, of which 230-260 million will be for Disney+. That’s up from the target of 60-90 million Disney announced at the last investor day in April, 2019. Note Disney said the new forecast includes Disney + Hotstar which will be 30-40% of total. Disney also continues to emphasize the bundle of Disney+, Hulu and ESPN+, which helped drive subscriber gains for the latter two services.
Disney’s content spending focuses heavily on extending existing franchises and brands, at which the company excels. There will be 10 new series from Marvel, 10 new series from Star Wars and 15 new series and 15 new features from Disney and Pixar. Some of the films will still go to theaters first, others will land on Disney+ first, including in the Premium Video on Demand (“PVOD”) model that Disney+ pioneered with “Mulan.”
Just a little over a year since its launch, Disney+ has established itself as a streaming leader. As a company Disney has pulled off a nearly flawless pivot from its traditional business model of distributing its content through third-parties to focusing on direct-to-consumer. With the increased content spending and accelerating momentum of the streaming market, the biggest Disney+ gains are yet to come, ensuring it will keep on winning.