Guy Bisson at Ampere Analysis has observed how Disney is now pursuing a strategy to create the ultimate streaming bundle, with appeal across a broad demographic customer base. It is a repeat of the traditional Pay TV model, and other streamers will follow, he says.
Bisson is Executive Director & Co-Founder at the analyst firm, and was reviewing Disney’s recent full year investor presentation. Commenting on greater bundling of streaming brands under one roof, he says: “It's a strategy we said was essential to the future of streaming in a report back in 2019. Had the pandemic streaming boost not happened, it surely would have been necessary sooner.”
In an analyst note this week, Bisson pointed out that Disney plans to acquire the remaining stake in Hulu (currently owned by Comcast) and also launch a 'single app experience' combining Disney+ with Hulu in spring 2024. “But that bundle will be taken further. As Disney transitions to a full DTC model for ESPN, it will also launch a 'full-Monty' bundle of Hulu, Disney+ and ESPN – with ESPN also remaining standalone as an option.
“We are, of course, back to a traditional Pay TV strategy of providing content for all the family in a cost-effective tier to increase subscriber retention. Disney, and arguably Warner Bros. Discovery, are the first to get there, but others will all follow.”
Bisson also reviewed the strategy for the Disney+ ad-supported tier, noting from the latest figures that much of the ad-customer acquisition must be coming from existing customers migrating across from the premium tier. “That is something Disney is actively encouraging through aggressive price differentiation,” he says.
“We can expect continued moves to push customers, both old and new, towards the ad tier, both domestically and internationally. Advertising technology will remain a major area of investment for the company, with Disney's ad expertise seen as another competitive advantage in an increasingly crowded market.”
Bisson lists the core pillars for Disney's strategy:
- Reaching streaming profitability.
- Developing ESPN as a fully-fledged direct-to-consumer offering.
- A new integrated entertainment bundle domestically.
- Revamping the studio business.
“All of these strategies feed one another and feed the streaming window,” he concludes.
Photo: Guy Bisson, Executive Director & Co-Founder, Ampere Analysis