Interview Synopsis

Disney – OTT strategy

  • Multi Asset
  • TMT
  • Global

If content is king, distribution — today — is queen, the former SVP and C-level executive at Walt Disney International told Third Bridge Forum.

Disney’s New OTT Streaming Service, Disney+: Challenges and Opportunities

Starting with an industry-wide overview of the direct-to-consumer streaming landscape, the Interview focused on Disney’s new over-the-top (OTT) streaming service, Disney+. It took into consideration the broader trend around the need to understand consumer behaviours — a field no longer dominated by technology giants — and the forces driving them. The specialist emphasised that having great content, a strong distribution network and long-term relationships with consumers are the key ingredients to success.

How consumers interact with and are willing to pay for content is changing, and multi-channel video programming distributors (MVPDs) are likely to struggle in the changing digital environment. While smaller MVPDs are trying to enter the marketplace, the specialist said they are simply replicating the traditional model without the hardware, and often failing to innovate at the level consumers have come to expect.

Meanwhile, the subscription video on demand (SVOD) and OTT market is getting more and more overcrowded, with few likely to survive. However, Disney is in a strong position because of its popular, long-standing content. “They’re not going to be the only one,” the specialist said. “The likes of Netflix will be well positioned to be here for the long term, and there’ll be regional players, like potentially Iflix or others, and there’ll be very few local players, because I don’t think it’s an industry that can survive just on local players.”

Although Disney+ growth will span the world, each market will experience individual penetration risks. In some cases, the specialist suggested that the roll-out of the OTT platform in global markets should occur a few years later than was previously projected because “it is not as trivial as just making the service available”. Understanding cultural nuances and ensuring that the messaging reflects those are crucial. He also outlined the risks associated with different markets and discussed how they relate to technology investments.

The Interview also touched on the opportunity costs associated with Disney removing content from Netflix, as well as potential affiliate fee compression derived from the opportunity. While the specialist said that he agreed with the pricing of Disney+, he raised concerns as to whether the product’s price would be high enough to offset the revenue losses that the company is likely to experience.

To access all the human insights from Third Bridge’s Disney – OTT Strategy Interview, click below to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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