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Disney Lays Out Multi-Billion Dollar Plan to Dominate the Streaming Wars

Bob Chapek (Courtesy of Disney)

Part razzle dazzle, part corporate flex, the Walt Disney Company’s four hour-long investor day presentation unleashed a torrent of announcements, including a slew of upcoming “Star Wars,” Marvel and Pixar series and features, and news that Disney Plus had surpassed 86 million subscribers.

For fans, the message was clear: Make room in your wallets for a Disney-branded streaming service, whether that’s Disney Plus, ESPN Plus, Hulu (now with more FX!), or for those outside of the U.S., Star and Star Plus.

The conglomerate’s message to the rest of Hollywood? Disney’s position as a leading, global streaming service force will be, as “Avengers” villain Thanos put it, inevitable.

As a clear mark of how much it intends to plow into its series and films amid a direct-to-consumer push, the company declared plans to spend $8 billion to $9 billion on Disney Plus content alone in fiscal 2024. It expects to have between $14 billion and $16 billion in global direct-to-consumer content expenses across Disney Plus, Hulu and ESPN Plus that same fiscal year.

Disney also supercharged its subscriber projections for Disney Plus to a whopping 230 million to 260 million paid subscribers by the end of fiscal 2024, up from prior forecasts given at its last investor day in April 2019 for 60 million to 90 million. Hulu is now expected to garner 50 million to 60 million subscribers in that period, narrowed from former estimates for 40 million to 60 million. And ESPN Plus is now seen attracting 20 million to 30 million subscribers in that time frame, up from a prior forecast of 8 million to 12 million.

When Disney Plus first hit the market over a year ago in Nov. 2019, some derided the service as being targeted primarily to kids. But Disney CFO Christine McCarthy debunked that line of thinking.

“The observation we have, which is real and data-driven, is that more people without kids are subscribers today,” she said.

Disney now forecasts 300 million to 350 million total global subscribers to its streaming services by the end of fiscal 2024, vs. the 137 million it had as of Dec. 2.

As Disney restructures its media and entertainment businesses to better point all of its creative artillery at creating a robust pipeline of shows and movies for its streaming services, it is aggressively ramping up production plans. Disney executive chairman Bob Iger, who stepped down as CEO nine months ago and transitioned to a new role overseeing content creation, said that the focus remains quality over quantity.

“The single most effective way to grow our subscriber base is with great content,” said Iger in the virtual webcast, which featured executive after executive announcing new projects, from Disney Television entertainment head Dana Walden to Marvel Studios chief Kevin Feige. “And as we increase our output, the emphasis will always be on quality, not volume. Quality holds its value. And that has been our mantra for as long as we’ve been telling stories.”

The comment seemed to be a not-so-subtle dig at Netflix — the leading streaming service in the U.S. that has grown to 195.2 million global subscribers since its inception more than a decade ago — and its apparent high-volume approach.

Even so, Disney is targeting the release of 100 plus new titles per year across all of its brands, with plans to bulk up its Disney Plus library content as well. Additionally, there are plans for 10 Marvel series, 10 “Star Wars” series, and 15 Disney and Pixar series and features for Disney Plus in the coming years.

“Production values and talent for our streaming content, both in front of and behind the camera, are on par with our theatrical releases,” Iger added. “Truly the only difference between these and our feature films is length.”

Disney CEO Bob Chapek called the 100-title target a “relatively immediate goal,” and, referring to the projects slated for the upcoming year, said that that includes 63 series and 42 films, “80% of which are initially destined for our direct-to-consumer channels.”

“Pretty much every one of our movies or series ends up on on the direct-to-consumer services anyway,” Chapek noted, underscoring the company’s commitment to streaming.

Leading up to investor day, questions swirled around whether Disney would work to preserve the theatrical window and release major films in theaters before placing them on a streaming service, or whether it would take Warner Bros.’ coronavirus-era approach and release every film slated for 2021 on a streamer the same day as it is released in cinemas.

The answer is largely the former. Tentpole films such as Marvel’s “Black Widow,” for example, will still get the big screen treatment. But several films — chiefly, Tom Hanks starrer “Pinocchio” and “Peter Pan and Wendy” — will skip theaters in favor of a Disney Plus premiere, while “Raya and the Last Dragon” will premiere on the streaming service for a $30 “premium access” fee on the same day it opens in movie theaters in the spring of 2021.

Disney is well aware of its status as an annual box office leader, with seven films last year ringing up more than $1 billion apiece in theaters. The company is not about to give that up easily, pandemic or not.

“We build those franchises through the theatrical exhibition window, and we did $13 billion back [at the box office] in ’19,” said Chapek. “So for us, it’s about balance. It’s about following the consumer as they make that transition. And so part of why we did the reorganization that we did is to ensure that we’ve got an organization that’s flexible to read all the cues, whether it’s the cessation of COVID, or it’s changing consumer behavior, so that we can very nimbly make decisions as we go forward.”

Of the premium access strategy, Chapek indicated that releasing certain films on Disney Plus on the same day they premiere in theaters is one that suits the company well — for now.

“Obviously right now, that works fairly well as we have a theatrical business that is being very, very challenged,” he told analysts during the Q&A portion of the event. “That enables us not to have the titles stacking up, if you will, by being able to encourage us to go ahead and release the title in the theatrical market, maybe before we’re back up to 100% penetration… We’re going to see, as we get more and more experience, whether we think that’s a strategy that can go forward as a business model.”

The company is also taking advantage of its various streaming platforms, showcasing plans to roll out an international Star streaming platform in February, and incorporating ESPN Plus into the Hulu interface early next year as well.

Among the many, many announcements made Thursday:

  • Disney Plus now has 86.8 million paid subscribers as of Dec. 2, up from 73.7 million just two months earlier

  • Patty Jenkins will direct “Star Wars” feature film “Rogue Squadron”

  • Among the many premiere dates announced, “Black Panther II” will debut theatrically on July 8, 2022, and will not re-cast the role played by the late Chadwick Boseman

  • “Star Wars” spinoff series on Ahsoka Tano and “Rangers of the New Republic” are headed for Disney Plus, as are Diego Luna starrer “Andor” and animated “The Bad Batch”

  • Hayden Christensen will reprise his role as Darth Vader in “Obi-Wan Kenobi”

  • “Raya and the Last Dragon” will premiere on Disney Plus for $30 premier access on the same day it is released in movie theaters

  • A “Moana” TV series is coming to Disney Plus in 2023; animated series “Tiana,” “Zootopia Plus,” and “Baymax” are also set for the service

  • Lin-Manuel Miranda will write music for Disney Animation’s “Encanto,” a musical comedy feature

  • ESPN won the rights to SEC sports from CBS in a 10-year deal

  • FX has an “Alien” series in the works from Noah Hawley

  • “Dug Days,” an “Up” spinoff series, premieres on Disney Plus in the fall of 2021, while a “Cars” spinoff series will debut in 2022

  • Chris Evans is voicing Buzz Lightyear in an upcoming Pixar origin story feature

  • The Kardashians will create content for Hulu

Variety's Elaine Low contributed to this post.


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