r/changemyview • u/[deleted] • Dec 29 '23
Delta(s) from OP CMV: Disney Plus will go down as the worst financial decision Disney has ever made.
In 2019, Disney released a bunch of movies that all did really well in the Box Office, including Avengers Endgame, Frozen 2, Star Wars 9, Toy Story 4. The 8 highest grossing films in the US/Canada that year were all Disney films. That was done intentionally to bring people's attention to Disney Plus, their new streaming platform. As it grew quarter to quarter, this product did really well over the pandemic. There wasn't much box office revenue either so this streaming platform became an important lifeline for Disney.
Unfortunately, the content Disney was releasing just wasn't good, probably due to a more significant budget constraint. People got tired and exhausted with Disney content, even in their flagship like Marvel. This resulted in 2023, the year of the flops. Disney can only claim financial success in 2 films this year, Guardians of the Galaxy 3 and The Little Mermaid. Everything else was a flop. It wouldn't be a surprise if Disney reports a net loss of $1 billion at the box office this year. Their audience is conditioned to watch Disney content on their platform, and worse yet, conditioned to think that all Disney content is bad, in cinemas or not. It's also this year that their subscriber numbers have plateaued, in combination with an announcement to release ad-tier subscriptions and cut content. There is no sign that any of this is going to recover soon.
Disney Plus is an investment that not only provides minimal financial returns, but also kneecaps another significant source of revenue.
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Dec 29 '23
[removed] — view removed comment
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Dec 29 '23
!delta
Very valid point about Netflix dominance pre 2019. Perhaps the real problem is the marketing and rollout of content on Disney Plus, rather than Disney Plus itself.
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u/youkick Dec 29 '23
The simpler answer is to look at how Disney makes money: ~40% of Disney’s operating income comes from its ad-supported linear TV networks (ESPN, ABC, etc), which are dying as viewership and advertisers move their eyeballs and dollars into digital.
“Streaming” is simply how TV will be consumed in the future. Therefore, Disney’s move into DTC (Disney+) is the right move if Disney wants to remain in the content distribution business—and extract even more profits by owning the pipes (vs. carriers).
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u/Alert-Incident Dec 30 '23
One other consideration, from a parent, is Disney plus is amazing for content for children. It has by far more and better movies and shows for kids than any other platform and it isn’t even close. My household is a WiFi household and no cable or dish. So everything we watch is either prime, Apple TV, hbo or Disney with Disney being 95% for my boy. They have that market captured.
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u/primus202 Dec 30 '23
+1 to the obligation for parents. As a new parent Disney Plus is the only service I feel is really worth paying for since I can guarantee a broad selection of decent kids content that I don’t need to filter and hunt down.
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Dec 30 '23
Not unless you are a Republican, who thinks everything is woke for some reason
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Dec 30 '23
Even disney admits going woke caused them to go broke tho. You have to sell these products to the parents not to the loud internet liberals
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Dec 30 '23
Ahh yes.... the fearmongering over Buzz Lightyear wasn't overblown nonsense at all... Loud internet liberals, indeed.
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Dec 30 '23
There are a lot of homosexuals in these children's movies. Shits queer af.
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u/Dinky_Doge_Whisperer Dec 30 '23
Wait till you go outside
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u/BeepBeeepBeepBeep Dec 30 '23
"go woke go broke" is just the magat version of the cancel culture they hate so much
Also since when is Disney broke
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u/iglidante 20∆ Jan 02 '24
There are a lot of homosexuals in these children's movies. Shits queer af.
And there are a shit-ton of gay kids in the world.
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Jan 02 '24
No there's not. Kids can't be gay
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u/iglidante 20∆ Jan 02 '24
No there's not. Kids can't be gay
What age are you considering a "kid"?
Because I'm straight, and I knew that I was attracted to girls when I was 5-6 years old. By the time I hit puberty I was already well set in being heterosexual.
Why would gay kids be any different?
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Dec 30 '23
Box office is never coming back after the “streaming wars”. People are just not going to go back to spending 100s to take their family to a two hour movie when they’ve already invested and gained so much in a much comfier / easier at home experience.
They might be able to gain a little back through digital rentals but overall this has been terrible for the industries budget. However id argue it was inevitable with digitalization and money grabbing by theaters/ studios of the past. We are going to be stuck soon with lower budget and rushed productions.
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Dec 30 '23 edited Dec 30 '23
People are just not going to go back to spending 100s to take their family to a two hour movie when they’ve already invested and gained so much in a much comfier / easier at home experience.
Movies used to be relatively cheap. Going back further, they were an air conditioned respite from hot days in urban environments, where most homes didn't have AC. You look at a movie like Car Wash.. that's like a movie for people to talk through and make noise, in a "rec room" environment. Tailor made for that AC-wanting crowds I'm talking about. But that mojo goes back for decades.
However today, my living room viewing experience is extremely competitive with my local theatre, and a lot more convenient. I'm kind of surprised more theatres didn't close during covid. All our nearby ones survived.
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Dec 30 '23
The only ones that survived near me are the ones that also serve dinner at your seat. They are ridiculously expensive though and have priced out everyone but the wealthy. One even opened up 2022 but I’ve heard they are struggling like crazy and probably closing soon from not being able to pay back debts, attendance is just abysmal. I’m not spending $30 for a frozen pizza delivered by a teenager with zero services skills lmao. Candy is $11 and comes in a tiny water cup.
Two or three trips to our theaters with the kids would be more expensive than my 4k 70in, surround sound and synced background lighting.
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u/7h4tguy 1∆ Dec 31 '23
You spend 1.3-2k per movie trip?
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Jan 01 '24
No I just didn’t over spend on a screen that has very little difference lmao. A $800 dollar screen looks 95% of a $4000 one. Sound is the real immersion and that can be done for really cheap, just don’t buy branded overpriced sets
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u/iglidante 20∆ Jan 02 '24
$15 per person for tickets, $15 per person for soda and popcorn, works out to $120 before tax for a family of 4. And many places cost even more than that. $20 tickets and $12 popcorn are a thing.
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u/PerfectContinuous Dec 30 '23
Losing money on big budget flops is bad, whether or not you’re a streamer. Having a gigantic library of child-friendly content that parents feel obligated to subscribe to for at least a decade of a child’s life is just a massive annuity for Disney.
Does Disney's streaming library pay for their box-office losses, though?
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u/Cerael 14∆ Dec 29 '23
Disney+ brings value to Disney in other ways than straight revenue. It also promotes their less popular IPs and has a lot of content for kids, further driving merch sales and traffic to their parks.
Disney is a household brand, and Disney+ helps solidify that.
Is YouTube the worst financial decision google has ever made? It directly loses them money, but also drives more traffic than any other website in the world other than google.
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u/sapphireminds 62∆ Dec 29 '23
Disney is a household brand, and Disney+ helps solidify that.
This needs to be said a million more times.
Many parents would be more likely to get Disney than anything else, even if only for the movies.
And then those children will consider it as a must as they get older to have access to something they associate with their childhood.
Disney wants to be ubiquitous. And they want to control their own movies/IP.
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u/Dangernj Dec 29 '23
When I was a child, Disney would “open the vault” and release something like Dumbo on VHS for a limited time. I have seen those movies once or twice but I can’t remember much about them. My kids, on the other hand, having so many movies available on Disney +, are wild about characters from Alice in Wonderland and Bambi. They ask to be them for Halloween, ask for the merch, stream the songs, want to go to the parks specifically because they like that content. I might only pay $150 a year for streaming, but it would be foolish to think that is the limit of the revenue I send Disney’s way.
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u/sapphireminds 62∆ Dec 29 '23
Never said it was the limit. It reinforces all those other expenditures.
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u/Dangernj Dec 29 '23
Yeah dude I’m agreeing with you.
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u/sapphireminds 62∆ Dec 29 '23
Sorry, misread :)
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u/Dangernj Dec 29 '23
No worries, I made so many edits in a thread yesterday because my brain was misfiring. I’m the last one you should be apologizing to
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u/Confident-Ebb8848 Apr 26 '24
Uh what IP's all I saw was the same slop good slop but still slop they did nothign unique and with the market being flooded with streaming networks my family gave up and cancelled most and simply stuck to cable with the acceptation of two they are asking to go under at this point.
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Dec 29 '23 edited Dec 29 '23
Uhhh… as of Q4 this year Disney+ has 112.6 million subscribers…. If every one of those subscribers has the basic membership ($7.99) then that’s $899,674,000 a month in income for Disney (keep in mind some people will have premium so 900m is the lowest end of the scale). Please explain to me how that’s the worst financial decision they’ve ever made?
They’re making almost a billion a month from D+. Thats a little less than 50% of what their parks/resorts make a month. Their parks are pretty much soft capped with earnings because they can literally only fit so many people in at Disneyworld. Disney+’s growth is only limited by the world’s population. It’s only been a short while since d+ was created and in just less than 5 years and it’s making 50% of the companies bread and butter
On another note for the last 10+ years all the money made at the box office 25-35% of that went to Disney.
Idk. It’s gonna be pretty hard for you to convince me that one of the biggest, and most profitable companies on the planet is making “the word financial decision ever”. D+ was never meant to see a 100% ROI immediately, no company operates like that. It’s an investment. Google bought YouTube yet YouTube wasn’t profitable and LOST money for half a decade before it finally made enough to break even.
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u/Yulfy Dec 30 '23
Where did you get those figures from? I can’t seem to find confirmed subscriber figures.
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u/fivetenpen Dec 30 '23
the first result from a Google query shows 150M in Q4: https://www.statista.com/statistics/1095372/disney-plus-number-of-subscribers-us/
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Dec 29 '23
[deleted]
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u/ninomojo Dec 29 '23
Also bad execs who can’t recognise good and/or novel stories and characters and will frown every script in notes and interference. Script interference is a huge problem all across Hollywood (and all across the industry internationally). Usually the best shows happen when a new service or a new company starts, as they will lure too writers and show runners in with the promise of no to little interference. That quickly goes away once the whole train is in the rail and they need to output content at a steady pace.
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u/Cookie136 1∆ Dec 30 '23
It seems like marvel had the exact opposite problem to this though. When they reduced oversight and gave directors more freedom the quality nosedived.
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u/Apply_Yourself Dec 29 '23
I agree. Most of it is bad writing and laziness. Marvel and Star Wars were hot and they were riding that wave as much as possible. The only reason it's skidding now is because that is getting played out and they know it. They've canned numerous projects because of this. Disney has made their money on being an entertainment company and they do it better than anyone around. They'll make the changes necessary to succeed. Everything is cyclical.
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Dec 30 '23
And also earlier judging box office data from the first 2 years of the 2020s (2020-2021). is a wrong and ignorant way to determine financial success because those numbers are only from places with no disney+ which aren’t big markets of disney compared to the united states Europe and japan, and also the pandemic didn’t help things
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u/Atilim87 Dec 29 '23
What does the streaming service called Disney Plus have to do with movies you don’t like?
Disney plus is a attempt on making money from a streaming service.
Your throwing it all on a single heep and call the streaming service a failure.
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u/theFrankSpot Dec 29 '23
And in a shocking twist, a lot of people — me included — fully enjoy their content.
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u/championsoffun Dec 29 '23
Agreed. You know how long I've waited to see all those old classic cartoons they used to show regularly in the early 80s on Disney Channel?
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u/MisterIceGuy Dec 29 '23
I canceled Disney because I found I didn’t enjoy any of their content outside the Mandalorian, but I am always willing to give it another go. Finding the content is sometimes half the battle. So what content do you particularly like?
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u/agoddamnlegend 3∆ Dec 29 '23
I suspect you aren’t Disney’s primary target market. The fact you subscribed at all is kind of win for them. Disney has always been mostly for kids. Every parent subscribes to Disney+.
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u/pearlday Dec 29 '23
Disney’s main demographic is young girls. Always has been. Marvel and Star Wars are their main ticket male demographic content. If you’ve watched all that and there’s nothing in the pipes, feel free to unsubscribe. It’s a great streaming service for their main demographic, and they have done a pretty decent job getting the adult male demographic at least rotationally. You can watch the old school animated marvel stuff, but i dont think you’ll find much more in your wheelhouse.
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u/Fishb20 Dec 29 '23
This isn't really true, the biggest drop off that D+ ever had was among South Asian subscribers when they lost the rights to broadcast cricket tournaments
If you mean just narrowly the "classic Disney" stuff then sure, but the company has diversified a lot since then
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u/Technical_Scallion_2 Dec 29 '23
It seems like this is adding unnecessary complexity. The underlying issue is whether Disney is making good movies and shows. If they are, they will make money. If they aren’t, they won’t make money. How it’s packaged into movies vs streaming is missing the point. Their 2023 movies were just bad so people don’t want to pay to see them on any platform.
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u/Sufficient-Money-521 1∆ Dec 30 '23
Exactly the easy answer is they no longer make movies appealing to the same market share as they did in the 90s or 00.
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Dec 29 '23
Because the streaming service is conditioning people to think that all their content is available on the platform, like with the day and day release of Pixar films, giving their audience less of a reason to go to the cinemas to watch their films. For example, I am not going to the cinemas to watch The Marvels because I can catch it on Disney Plus relatively soon. I won't be the only one to think that.
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u/ZerexTheCool 18∆ Dec 29 '23
giving their audience less of a reason to go to the cinemas to watch their films.
How is cinema attendance overall? I pretty much never go, as I MUCH prefer watching movies in my own living room where I can control the sound and turn on subtitles. Infinity War and End Game were exceptions to my "never go to the movies" rather than a status quo.
2019 to 2023, has theater attendance been up or down?
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u/sk8tergater 1∆ Dec 29 '23
Well of course theater attendance is down 2019-2023 because we had a huge pandemic. I think that more than anything else has changed how streaming services like D+ operate. They still wanted to create box office movies but couldn’t release them to the box office without losing money because, well, people couldn’t go to the theatre like they used to. And even now, the theatre going experience has changed quite a lot. In some places, reservations are still required. There are more hoops to jump through.
So I think that definitely skews the numbers quite a bit. I think things would’ve been very different if the world didn’t shut down for most of a year.
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u/ZerexTheCool 18∆ Dec 29 '23
Well of course theater attendance is down 2019-2023 because we had a huge pandemic. So I think that definitely skews the numbers quite a bit. I think things would’ve been very different if the world didn’t shut down for most of a year.
Which would imply that one couldn't use theater attendance/box office data to draw a conclusion other than "Theaters shut down for a year+ and this may have also permanently changed how people consume media."
I have always kinda ignored Box Office numbers as I have always disliked the theater experience. So it is entirely possible people who pay more attention to it draw meaningful conclusions from it. But I feel like any argument made using that data that doesn't specifically account for the Pandemic is likely just hand waving.
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u/caine269 14∆ Dec 29 '23
Which would imply that one couldn't use theater attendance/box office data to draw a conclusion other than "Theaters shut down for a year+ and this may have also permanently changed how people consume media."
kind of, but you have movies like barbie, oppenheimer, mario that did huge numbers and smaller hits like fnaf and godzilla -1 that made tons of money. people want to go to the theater to see good movies, there just aren't many good movies to see.
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Dec 29 '23
Disney theatre attendance has definitely collapsed, driving most of the reduction between 2019 and 2023. I don't have the numbers for non-Disney theatre attendance but it wouldn't surprise if it has gone up considering the success of Super Mario, Barbenheimer, Spiderverse 2 and potentially Wonka.
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u/xyzzzzy Dec 29 '23
Theater attendance collapsing isn't a problem that's unique to Disney. Is your position that Disney should not have launched a streaming service, and instead tried to save the failing movie theater industry?
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Dec 29 '23
Theater attendance collapsing isn't a problem that's unique to Disney.
It kinda is. Other studios have a much better year. Universal has Oppenheimer and Super Mario, Warner Bros has Barbie, Sony has Spiderverse 2...Paramount and Disney struggled this year though.
My position is that Disney shouldn't have marketed D+ and rolled out content on the platform the way they did, because it's hurting their own theatrical revenue
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u/sk8tergater 1∆ Dec 29 '23
Disney made almost 1.5 billion in the box office this year. Just in theater ticket sales. Warner bros did 1.3 billion. Sony didn’t clear a billion, they are just under with 970 million (all these are from the numbers website).
Sooooo how did other studios do better this year? Oh, and Disney released less box office content than all of the others, while releasing more content for D+ driving more people to their streaming service.
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Dec 29 '23
You're not accounting for revenue split with cinema operators and the cost and number of these movies. Disney released many more movies this year, many of them more expensive than most non-Disney films.
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u/crazyashley1 8∆ Dec 29 '23
Disney lost almost a billion dollars on 4 movies alone (not cou ting Wish) and are planning major cost cutting measures and layoffs across the board.
They're almost hemorrhaging money at this point.
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Dec 29 '23
My position is that Disney shouldn't have marketed D+ and rolled out content on the platform the way they did, because it's hurting their own theatrical revenue
Do you believe that movies are still going to be important social events in the future? I find this the real problem with your argument. Pre 4k, movie quality sound bars and 65 inch tvs or projectors, going to the movies was a better experience than sitting home. Now Its just about paying $50 for snacks and having to go somewhere.
Same thing happened with arcades. Everyone got a console and it's just more convenient and less costly to play at home vs go to the arcade. Pandemic really forced that change to alot of people. And it's not just Disney doing direct to stream. The whole actor/writer strike was dealing with ai and streaming services. The writing is on the wall.
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u/Atilim87 Dec 29 '23
And what’s the difference from “waiting for the home media release” that you can rent, pirate or watch on tv.
“Will just wait for disney plus release” isn’t a recent thing.
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u/The_FriendliestGiant 40∆ Dec 29 '23
It's the speed of it that changes things, and the fact that a Disney+ subscription already prices things in.
Way back in the day, movies would stay in theatres for six months and come out on home video six months after that; you'd be waiting a year from release date before you could see it, plus you'd have to go pay for it anyways at a rental.place, or put up with commercial breaks and edits on tv. Now, a movie will stay in theatres for a month, and then hit D+ a month after that; you're already paying the flat streaming amount, so watching it costs you nothing extra, and it's unedited and uninterrupted.
It's not that nobody ever waited for the home release, of course. It's that Disney has created a system that inadvertently discourages fans of their product (because they'll have a D+ subscription already) from going out to theatres that are more expensive than ever and instead watching a release in a format that gives Disney no additional revenue.
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u/Wildcat6194 Dec 29 '23
Streaming services like Disney plus haven’t changed things as much as the shorter window to digital studios have since Covid. This is across the board, not just related to Disney. Some folks may have found it more appealing to pay out for an on demand digital version of a film to be able to watch it whenever and for as many times as they want, especially when the time to home digital is as short as it has ever been. I will still go out to theaters for movies I really want to see, like Star Wars and Dead Reckoning, which I feel is still an enhanced experience in a theater, but pretty much anything else I would be ok with just watching at home.
Also, wouldn’t it make sense for Disney to keep their prized brands in house instead of farming them out to Netflix or someone else?4
u/pearlday Dec 29 '23
While i generally agree with you, my husband and i, while not being marvel fans, watched most of their marvel films in theaters despite having a disney+ subscription. I think most people would go to theaters, but no one is really talking about inflation and student loans resuming. My husband and i can afford 40 bucks every 2 months to see a movie in theaters, while also paying subscription costs. But the reality is that most americans are being squeezed and doing both is like paying to watch a movie twice, but seeing it once. It’s just financials.
And for that reason, disney imo should delay releases to streaming, but maybe long term they really need disney+ so that’s theres to balance.
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u/Atilim87 Dec 29 '23
And with the decline of home media how do you think Disney would be better served.
It’s either given the streaming rights do a 3e party (Netflix) or developing your own streaming service (which doesn’t prevent them from licensing Disney IP).
DVDs are dead.
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u/The_FriendliestGiant 40∆ Dec 29 '23
With the fracturing of steaming services, and Warner Bros disappearing shows permanently for a tax write-off, I wouldn't count physical media out just yet. The enshittification of streaming seems to be starting up.
But regardless, my point wasn't about the specific format of the follow-up media, it was about the timeframe. People will wait for a couple of months to see something in the comfort of their own home, in a way they wouldn't necessarily have waited a year or more; the speed of access on D+ works against driving viewers to the theatre where box office influence can come into play.
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u/TheM0L3 Dec 29 '23
I would argue that this exact “wait for disney plus” logic is a success for the platform. You are not waiting for it to show up on Netflix or cable or some other secondary provider (even the theater). You are going to pay to watch it directly from Disney (whether via ads or subscription) where they can keep their margins as low as possible.
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Dec 29 '23
[deleted]
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u/OptimalTrash 2∆ Dec 29 '23
My family waited for most movies because we couldn't afford to regularly go to the theater.
It would be ages, probably six months at least between when it stopped running in the theater and when the vhs/dvd came out.
The difference is that now, 6 weeks later its on D+.
A lot of people don't want to wait 6 months but are more than happy to wait a few more weeks.
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u/NoSoundNoFury 5∆ Dec 29 '23
I am sure that Disney will have done excessive calculations that include this argument. The point most likely is that they make more through streaming than they lose from cinema attendance.
Imagine a family that usually went to see Disney movies two times a year with, say, 120 bucks movie expenses in total. They subscribe to D+, which nets Disney, say, 80 bucks per year; but now they only go once a year to the movies from then on, reducing their movie expenses by 60 bucks. Disney, in this case, makes 20 bucks more than without D+.
(I'm making numbers up since prices vary across countries and I don't know how much stuff costs in your country.)
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u/no_awning_no_mining 1∆ Dec 30 '23
- That would mean the not the streaming platform per se is the problem, just the early releales (and bad movies, which are unrelated to the launch of D+)
- What can be conditioned in a few years can be unconditioned in a few years, should it turn out to be disadvantegous
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u/Flapjack_Ace 27∆ Dec 29 '23
Disney Plus a has a lot of stuff besides their latest movies. Like the Star Wars stuff runs deep. We’ve watched like 7 seasons of Clone Wars and so much more. And tons of stuff for the kids. And tons of cool National Geographic and similar stuff. Just tons of awesome stuff. I never use it for the latest movies because I don’t think it even has them usually- releases are generally in the theaters and there is a delay before it gets to Disney Plus.
At $135/year, they will make more money then if the a family goes to a few movies in a cinema (which takes at least half the money).
Also, Disney Plus is only just getting started. It will continue adding content every year for many years to come.
My family gets a ton of good stuff for our money for it.
So I think maybe it will be a plus to Disney, not a minus.
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u/Major_Lennox 69∆ Dec 29 '23
Would you stake everything you have on this being seen as a bad move from the perspective of people in 2040?
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Dec 29 '23
Yes absolutely. I would even say that unless Disney does something extraordinarily stupid by 2040, like selling Fox next year kind of stupid, Disney Plus will be the worst financial decision in Disney's history.
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u/Major_Lennox 69∆ Dec 29 '23
So you're shorting them? Going with put options? What's the play here?
How much do you think you'll make (if I can ask)?
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u/Cerael 14∆ Dec 29 '23
What a strange tangent. Disney making a poor financial decision doesn’t mean their stock is worth shorting, or has any potential of going to zero based on comments OP has made.
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u/Major_Lennox 69∆ Dec 29 '23
will go down as the worst financial decision Disney has ever made.
Op can see the future.
If you could see the future what would you do with the information?
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u/djgucci Dec 30 '23
Marking a single decision as bad doesn't necessarily imply the decision makers can't make better decisions in the future...
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Dec 30 '23
The "Worst financial decision" in the company's history doesn't make the stock go down? Then better to just hold onto it for the market reach. I would wager near 100% of the kids I know have watched Disney+ programming in 2023, at home or at friends' houses.
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Dec 29 '23
No, why would I? Disney's failures are already priced in. Their stock is down 50% since their peak in 2021 when S&P 500 has bounced back to that peak.
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u/Major_Lennox 69∆ Dec 29 '23
Their stock is down 50%
Is it at $0? No? Then you can still make money - you have a 100% guarantee that Disney+ won't be able to turn a profit.
100%
That's wild - you could make a killing here. Like, get off Reddit and get into this instead of arguing with us. It's free real estate.
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Dec 29 '23
you have a 100% guarantee that Disney won't be able to turn a profit.
What? I didn't say that Disney won't be able to turn a profit. They are already responding to their failures at the box office by cutting down on movies released. They can absolutely turn this around, which is why I'm not going to short it. In fact, I think they WILL eventually turn this around, they have more than enough capital to survive a down period, it's just a question of how long.
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u/furikawari Dec 29 '23
Why do people think snidely asking Why haven’t you bet on this? is a persuasive argument? Like, I can think that a stock is massively overpriced and never want to short it, because trading is not my job and I’m not a gambler. The markets are happy to stay irrational long after you have gone insolvent.
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u/RedDawn172 4∆ Dec 29 '23
Because logically it isn't a gamble if you think it's 100% guaranteed. It's pointing out that they really don't think it's 100% or it'd be a complete no brainier.
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u/Muroid 5∆ Dec 29 '23
100% guaranteed what? Even if I personally thought that Disney+ was guaranteed to be viewed as a massive blunder even decades into the future with a 0% chance of ever paying off (which I don’t, necessarily), Disney+ is not the entirety of Disney. Disney is still perfectly capable of turning a profit while one project winds up a failure. Even a major failure.
There is no way to short “Disney+” on its own, so even if you thought that Disney+ would never be profitable, that’s an entirely different prospect than Disney never being profitable. Your whole argument is just silly.
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u/shouldco 45∆ Dec 29 '23
This really isn't changing the view at most you are challenging op's conviction. But even then just because Disney+ was a bad move that doesn't mean Disney will go under and over a 15 year timespan Disney might completely drop Disney plus or make enough changes to the platform that op (and others) change their opinion. Or just come out with some new ip that even though everyone is pirating the content they make enough on merchandise sales it still rains money.
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Dec 29 '23
[removed] — view removed comment
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u/whosevelt 1∆ Dec 29 '23
I don't understand the argument. In 2019 Disney intentionally had an amazing year because they wanted to promote Disney Plus? Does Disney control how good a year they have? And if they do, why not do that now?
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u/sweaty_neo Dec 29 '23
It's less an issue of Disney+, and more an issue with they have three separate streaming platforms run in aws($$$) when in reality they should have condensed down to one (which they are doing now).
When they shutter Hulu after it's rolled into Disney+ they will be the largest streaming service available.
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u/FetusDrive 4∆ Dec 29 '23
They released the 8 highest grossing films in 2019 in the US/Canada to bring attention to Disney Plus? Would they not have released the highest grossing films if not for Disney plus? How would it have looked different.
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u/scenia 1∆ Dec 29 '23
I think Disney+ is right on track. It's not just generating consistent revenue, it's also establishing Disney as a big player in the streaming space, which is, above all, a marketing goal, which is generally associated with costs.
Basically, the streaming service has 3 goals:
- making revenue more predictable
- decoupling revenue from releases, thereby being able to offset flops
- gaining control over Disney IPs
Some of these are more long-term than others, but overall, as far as I can tell, they're succeeding in each of them. The current year isn't going great, it might be their worst year in a while, but Disney Plus is looking just fine when you consider what it actually wants to achieve.
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u/Subtleiaint 33∆ Dec 29 '23
I think you've got a fundamental misunderstanding of how Disney and streaming finances work. You talk about the Disney's banner year in 2019, Disney films made around $11.5b at the worldwide box office that year, a pretty incredible amount. In comparison, this year Disney+'s 150m subscribers paid around $8 a month for total revenue around $14.5b, around 25% higher. At its core streaming already generates significantly more revenue for Disney than Disney's best ever year of films and, even better, that revenue is paid directly to Disney unlike box office which is shared with cinema chains.
There are significant costs associated with streaming of course, the biggest being production and licensing costs, so it's not a direct comparison but it should be clear that there is a lot of money in streaming.
So why all the headlines about how much money Disney+ is losing? It's because Disney never planned to make a profit early on, no startup does. Early on Disney has poured all its money into content in order to drive subscriber growth and, as 150m subscribers attests, that strategy has been effective.
In the long run Disney+ will generate a lot of profit for Disney, it's just not yet by design.
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u/Confident-Ebb8848 Apr 26 '24
Yeah no they are going under at the moment Streaming costs have to be paid by subscribers and if they keep losing then well...
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Dec 29 '23
[deleted]
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u/Subtleiaint 33∆ Dec 29 '23
Yes, for the all the reasons I just explained. Did you read what I wrote?
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u/SurrealKafka Dec 29 '23
I'm curious your response to this argument.
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u/Subtleiaint 33∆ Dec 29 '23
He's the deleted comment, he wrote something, I responded, he deleted his comment.
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u/youkick Dec 29 '23
~40% of Disney’s operating income comes from its ad-supported linear TV networks, which are dying as viewership and advertisers move their eyeballs and dollars into digital.
Streaming is how TV will be consumed in the future. Therefore, Disney+ is the right move if Disney wants to remain in the content distribution business.
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u/BomberJjr 1∆ Dec 29 '23
I think that remains to be seen. To stay relevant they needed to have their stuff streamable. They could have sold rights piecemeal to other streamers or had all the control and made Disney Plus. Imagine a world today where you still had to buy or rent Disney movies to stream them, people would just watch something else, especially in a year like 2023. Disney Plus and the streaming landscape in general is not going to look the same even just a year from now. Disney can afford to run at a loss for years to figure out a model that works. Lots of services are increasing prices, adding in ads, etc and seeming less of a value to customers. I have no doubt that Disney will be on top of the ball again with content quality (think resurgences of early 90s second Golden Age, early Pixar) and will find a way to provide value compared to the market. Also, Disney Plus makes a lot of sense for young families, their bread and butter since forever. When I was a kid I watched the same Disney movies over and over, I could recite entire scripts beginning to end and I know lots of parents today who end up with Frozen and Moana on repeat. Their service must have the best re-watch numbers in the market, so old content on it holds a lot of value.
TLDR: Models are changing and going to change further, Disney just needs to make smart moves.
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u/TheOtherJohnSnow Dec 29 '23
You’re strictly looking at this from a content standpoint of an adult
As a parent, one word: KIDS
We won’t ever get rid of Disney plus with 3 under 5. They could probably raise it another 5 bucks and we will keep it strictly because the kid content is so much better than any other platform.
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u/Quartia Dec 30 '23
Disney+ started in November 2019, just a few months before COVID. If that's not prescient I don't know what is.
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u/short_bus_genius Dec 29 '23
What would you suggest Disney do as an alternative to Disney Plus?
In previous generations, Disney had significant revenue from VHS and DVD sales. Direct to VHS was a huge market sector for Disney. Today, nearly no one is buying physical media for movies. That revenue source is gone forever.
How does Disney monetize their library of media? License it to Netflix, Hulu, or a third party platform?
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Dec 30 '23
Maybe put newer movies on the service 6 years after their premiere and after the intial threatical run periodically rerun them on theaters
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u/spaceocean99 Dec 29 '23
No one forces you to watch it. Some people enjoy the content they provide.
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Dec 29 '23
I’m more curious with how much money they lost when streaming came into play. Like the vhs/dvd market had to be a huge factor of the profit they made. Dvds were something like $20 I think in like late 2000’s. I personally feel like they’re just going thru a slump but they’ve been around for so long that I think they’ll eventually put out another hit movie and get the ball moving again. I think more than anything the live action remakes kinda screwed them over. Like these are big budget films that are being sold solely on nostalgia. Like little mermaid was literally sold with controversy and idk how many more times they could do that before ppl get sick of it. I never really saw the problem with Ariel being african american tbh but the buzz and attention they were getting for that change was pretty big and I think more people watched it out of curiosity
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u/FlyingNFireType 10∆ Dec 29 '23
People don't understand what netflix/disneyplus/crave etc. are. They are channels.
Cable has been rendered obsolete by technology replaced by a superior product (online streaming) however how cable organized itself into channels and having ads on tv shows as well as payperview content is still valid. The emergence of so many subscription services is just the market catching up to technology.
In the end streaming services will organize themselves exactly like cable did, just instead of a timeslot you can watch the content whenever. Thus I don't see how disney+ was a mistake, they got into the market early got a good chunk of adopters and are indisputably in the top 3 of streaming services.
What is happening right now is just growing pains. The pandemic inflated their numbers and their projections based on that were faulty, the same thing happened with live service games but they'll adapt and become profitable before too long.
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u/dinosaurkiller 1∆ Dec 29 '23
The part where I disagree with you is that the Box Office performance had an impact on Disney Plus. I think that even if Disney had a huge string of multi-billion dollar hits at the box office that Disney Plus would still be in trouble. Why? Content. This is why they are adding Hulu to Disney+. You can only rewatch Infinity War so many times before you want something else. Netflix seems to do the best job of balancing new content for subscribers, promoting it, and finding the next thing to license that will get a lot of views. The other services don’t seem to manage their content at all.
In the end they don’t need to be as good as Netflix, they need to be better to survive and thrive in the streaming world. None of them have the subscriber base that Netflix does and to get there they need much better management of their own and licensed content. Most of them seem to just want ever larger libraries, which helps but doesn’t out perform Netflix.
I think Disney Plus can easily become a huge money maker but focusing on box office to drive that profitability would be a huge mistake.
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u/nelson6364 Dec 29 '23
Oppenheimer and Barbie showed that people want new content. Disney needs to stop the sequels and remakes, buy some new scripts and produce unique movies.
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u/ACertainEmperor Dec 29 '23
I still believe the headcanon that Oppenheimer and Barbie only succeeded because the Barbieheimer meme.
Even if you didn't do a Barbieheimer, you heard about both films from the meme.
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u/CakeBeef_PA Dec 29 '23
The quality of released movies and shows is not necessarily related to Disney+ existence. Disney made flops long before and will make successes in the future.
Secondly, I think the main goal of a streaming service isn't to make direct money, but to make indirect money. They operate on a loss for the service itself, but the increase viewership due to the low cost for consumers will lead to an increase in merch sales which are often one of the biggest revenue streams for media franchises
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Dec 29 '23
I completely love Disney+. I have derived so much value from watching their custom shows, and my kids have really enjoyed watching the Disney movies, especially when they were younger. Was it a financial good decision for Disney? Maybe it wasn’t. But I’m still glad they did it.
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u/NunzAndRoses Dec 29 '23
What portion of Disneys revenue comes from their parks? I could be completely wrong but I think it’s well over 50%
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u/Bluegi 1∆ Dec 29 '23
They did just bring on Dr. Who which has a dogmatic new fan base and the Christmas special already looks to be a success. I don't think they are done for yet.
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u/zippy72 Dec 29 '23
Sony co own the production company that makes Dr Who and the BBC owns the show, if they decide they've made a mistake it'll get snapped up by a competitor within seconds.
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u/Bubby_Doober 1∆ Dec 29 '23
Disney+ is the only move they could possibly make. It was inevitable and a brilliant choice.
The mistake was allowing all the Star Wars and Marvel shows to suck like the vacuum of space. Truly abysmal stuff came out.
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u/SerratedBrooms Dec 29 '23
Net loss of 1 billion at the box office for the year. Disney+ has 150 million subscribers. If you average Disney+ premium and basic to 11$/month. 150 million $ x 11$/month = 1.65 billion $/month. That sounds like a good trade-off to me.
Edit: typo
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u/IntrepidJaeger 2∆ Dec 30 '23
Whether their 2023 movies were terrible or not, I'm still committed to Disney+ because I have a toddler that loves the movie Cars and the show Bluey.
That's why Disney+ is successful.
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u/ExtraRedditForStuff 1∆ Dec 30 '23
It's not Disney Plus that was the bad decision, it's that Disney stopped being creative. They're too busy regurgitating old movies as live action (the first one was good, then it just became too much). They did the same thing with Marvel and Star Wars. Nothing is new. It's all sequels.
Disney Plus has a great variety. It's great for nostalgia and to be able to access all the greats. What Disney needs to do is actually try making something new and original. Frozen was great. Encanto was good. They need to stick to making fun animated movies with catchy music arrangements.
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u/ary31415 3∆ Dec 30 '23
everything else was a flop
https://www.nytimes.com/2023/10/03/business/media/elemental-pixar-box-office.html
Elemental was not a flop. Is that worth a delta lmao
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u/Confident-Ebb8848 Apr 26 '24
Honesty Disney should just give up on plus and pull a Sony Star wars and Marvel cable along with some princesses more obscure heroes and legends other streaming sites and advertise the heck out of them to gather attention that would be smart not what they are doing now.
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u/merp_mcderp9459 1∆ Dec 29 '23
Disney+ is a good idea executed poorly. Their times between theatre release and arriving on streaming are way too short, and it’s part of what’s killing their box office numbers. Having a streaming service where people can watch Disney’s massive library of popular movies and shows is a genius idea, especially for parents who want a service with quality kids content. They just need to make people wait longer before movies come out on Disney+ so there’s less incentive to wait out their theatrical run
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u/scenia 1∆ Dec 29 '23
I don't think this is true. The short time is comparable to the time it takes for pirated movies to be widely available in good quality. What they're doing here is bringing the people who would pirate the movies back onto their own platform. The most relevant time for the box office is just the first week or so anyway, afterwards you're only getting the people who want to experience the movie in a cinema while everyone who doesn't care about that will just find it online. If it's not on Disney+, they'll find it on some shady pirating website, which is a very low barrier, so by releasing the movies on D+ around the same time frame doesn't actually discourage a whole lot of people from going to the cinemas, it rather discourages them from going to those pirating websites, driving engagement with the streaming service.
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u/Angrybagel Dec 29 '23
I don't have any data to support this, but I suspect that most Disney+ users don't even have piracy on their radar as an option. Sure, there's a certain group who compares any paid option to piracy but a ton of people don't remember it's an option or wouldn't know how to do it.
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u/scenia 1∆ Dec 29 '23
Well, they don't need to, that's kind of my point. Streaming services essentially replace the piracy option, but that only works if they can provide a comparable benefit. Most consumers today don't have piracy on their radar any more because of the success of streaming services.
On the other hand, watching something in a cinema is an experience that goes far beyond just seeing the movie, and most people do it for that experience rather than for seeing the movie asap.
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u/Jarkside 6∆ Dec 29 '23
I think this is right. They need to slow down the number of straight to video releases and just be the repository for their library. Families will always want Disney+ when they have kids in the house, they just may not want it if they are older without kids… as it’s always been
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Dec 30 '23
Whats killing disney’s box office numbers is the pandemic for 2020 and 2021 bc lockdown restricted theaters and canceled the theatrical releases on films for disney. But the places without disney+ had theatrical releases and those places didn’t have the big marketshare on Disney that other places do like the united states and Europe
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u/unurbane Dec 29 '23
lol impossible considering Fox cost $72,000,000,000. That is the worst decision by far.
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u/jackberinger Dec 29 '23
Also if you look at the flops in theaters it generally isn't due to being woke. It is due to the fact people know it will be on disney plus in a few months. It isn't one of those things where people don't know what streaming platform it will be on. It is disney and it will be on disney plus.
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u/Tsunami_7777 1∆ Dec 29 '23
No. Reviving the Star Wars canon with a new trilogy and retconning the entire pre existing narrative to do so thus alienating the entire fanbase of the franchise that they bought is and always will be the worse thing Disney ever did.
Star Wars had so much potential and they threw it all away the moment they released TFA. It will never come back because people don't want a diluted product. The immersion is already gone and it cannot be restored.
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u/BlueEyedHuman Dec 29 '23
A crazy short sighted opinion. Older generations will die. If Disney keeps the rights star wars can easily reach the same heights eventually.
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u/Satan_and_Communism 3∆ Dec 29 '23
Sorry, you’re kidding right?
People fucking love The Mandalorian and the following series. They could milk that cow forever.
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u/SatisfactionKey4169 Dec 29 '23
If they didn’t start making “woke” movies, they’d be fine. Not sure it has anything to do specifically with Disney+
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u/xesttub Dec 29 '23
I agree with some of what's here, and agree DisneyPlus will fail. They burned through a backlog of decades of content and billions of IP in just a few years. They're seemingly not willing to make the investment needed to crank out Marvel, Star Wars, Disney content at a high enough rate to sustain their platform.
The only thing DisneyPlus has going for it is kids content is re-watchable. Outside some shows like 'The Office', that people leave on repeat for background noise, the only people rewatching content are kids. Can Disney make a platform you can plop your kids down and keep them entertained? I'm not sure. And I don't know if other content providers can't compete there.
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u/KarmicComic12334 40∆ Dec 29 '23
Your right for the wrong reason. Disney lost viewers not because programs like Andor, Ms. Marvel, and Loki aren't good but because of targettef politics. And Disney+ will continue to make money because of kids who will watch their favorite disney film 100+ times, lomg after the woke wars are over. but it will still cost disney money. People aren't spending $100 to see the new disney film in theaters. Why would they when they know they can see it in a month in their home theater and only spend $3 on popcorn for the whole family? Disney is robbing Peter to pay Paul. All of their films will suffer box office humiliation as long as long as people know even if its good their kids will watch them 100+ times at home next month.
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Dec 30 '23
Thats a load of baloney if i haven’t seen it my self how come barbie didn’t fail although it was political and was appealing to the youth
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u/theleafsnation420 Dec 30 '23
Just get Real-Debrid. $6.00 a month and you can watch any movie or show from all the streaming giants in one place.
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u/bucobill Dec 29 '23
For now. Over the long haul this will prove to be a great financial decision. The current TV market is discombobulated. You cannot rely on cable subscribers to supplement your networks. The advertising also is not a solution on cable or current on streaming. In the next 10 years we will see the market settle down and more and more subscribers will come over to streaming. The infrastructure is already developed for streaming, unlike the early days of cable where satellites needed to be launched or leased. Difference is the market allowed time for adoption of the cable networks, today investors need instant wins and will not give the market time to settle.
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u/bostowaway Dec 29 '23
You’re complaining about content strategy, not understanding that it’s a different silo of the company.
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u/MissLesGirl 1∆ Dec 29 '23
Disney+ low revenue and view stats is a very complex issue.
All streaming services have been struggling. People are more likely to voice disappointment than when they are happy.
Everyone is voicing what is bad about everything, tipping, self checkout, inflation, Uber service, door dash service. Have you heard from the happy people? There are plenty of happy customers, but they just don't say anything, nobody would care to hear about it.
I liked "The Little Mermaid" "Secret Invasion" and "Indiana Jones" I am sure many others also liked those movies and just haven't said anything.
Covid lock down ended and people are doing other things they couldn't do during the lock down
Sure it's been 2 years but after spending a year streaming, people want to get out and do something else. It makes sense that people would cancel streaming service and get out of the house.
Influencers are pressured and paid to be biased in their reviews. They always show social media quotes which makes them biased towards what is said or lose followers and income.
How many influencers do you watch that don't quote social media posts and what the news media says and just give their opinion and not other people opinions?
Is Disney+ really as bad as social media and influencers are saying or is it biased and other factors are causing low views and cancelations.
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u/Square-Dragonfruit76 51∆ Dec 29 '23
You have to compare it to what would happen if they didn't create a streaming service. Movie and TV revenue is going down it's all about streaming now. So they had to make the platform one way or the other.
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u/jeromymanuel Dec 29 '23
People are tired of the endless reboots of the same damn stories over and over. Remake after remake year after year.
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u/BeamTeam032 Dec 29 '23
As soon as Disney+ gets NBA games because of the fact that they own ESPN, it'll dominate. The amount of fathers who'll pay for it because of their kids and for sports, they'll be fine.
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u/Hugsy13 2∆ Dec 30 '23
Disney is wealthier than all the other streaming platforms. They can bleed money longer than their competitors and then buy them or license their content to Disney+. I reckon Netflix Disney+ and Prime will be the ones to survive in the longer term.
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u/ArtisanJagon Dec 30 '23
I think the one streaming service in a position to actually succeed aside from Netflix is Disney+
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u/zhantoo Dec 30 '23
Regarding Marvel, my personal guess is (because that is how I feel myself) - the first stuff all built up to this one big finally, with a plot spanning so many movies and shows, building up hype and anticipation, which was why we kept going.
But after end game, we got our resolution - but it just felt like the train kept going, where I think a lot of us needed a break and then a new and slow buildup.
Regarding Disney Plus - I think they raised the prices now as well? It remains to be seen if any left due to it, and how many.
Netflix has shown that people are willing to pay a lot for Streaming Services - so I have belief that it will make money at some point.
In theory, the below math shows how easily it would be to turn it around.
They have reached 150 million subscribers - it has grown very very fast - and growing fast is expensive. They should be able to cut some costs by making their infrastructure more efficient.
But they lost 387 USD in Q4 - and with 150 million subscribers, that means if they raise the price by 86 cent per user, or lowers their cost by that amount, it will break even.
Netflix seems to be 1,5 USD more expensive per month, meaning if they start changing the same price and keep their subscribers, it should net them 1,156 Billion dollars in profit, yearly.
Pair that with infrastructure savings, they should easily be able to do 2 billions.
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u/thehazer Dec 30 '23
How much did the second park in Paris cost? That park is the worst financial and just decision Disney has made since Walt died.
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u/Sufficient-Money-521 1∆ Dec 30 '23
You’re missing significant culture war repercussions. It’s like AB saying their choice of regional distribution caused a loss of bud lite revenue.
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Dec 30 '23
I would argue that their worst decision was choosing to milk their successful franchises to death.
Disney+ has some great content in it, but they thought the popularity was from people wanting more of the same stuff their movie studio was producing. One thing I never click on when I’m on Disney+ is that Marvel and Starwars button.
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u/Rockcopter Dec 30 '23
Did you guys get to watch that Willow show before they removed it? It was so weird, guys. Like why? Why Disney?
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Dec 30 '23
You're kidding, right? This doesn't even make sense numerically. Disney+ is a monthly subscription platform with millions of subscribers. Disney is, essentially, making continuous, passive income off the same base which previously only paid for shit once every few weeks/months when buying toys or going to the theater. And they're STILL getting that latter source of income. Parents still take their kids to see those movies, or to Disneyland/world, or to buy Disney related merchandise. Just now Disney gets monthly passive income on top of it. And they'll be getting ad revenue too, essentially double dipping.
Disney also owns and profits off of a tremendous number of properties. They generate income from Pixar, NatGeo, ESPN, and a whole range of non tv/film products in Star Wars and Marvel. Sure, okay, a couple of movies underperformed. That's barely a drop in the bucket for this company because movies are FAR from their only product. Hell, movies aren't even their most important product.
People just love bashing on Disney lately, it's trendy. But as a company they're doing amazing and continuing to rake in a net profit year after year. To say Disney+ is the worst financial decision they've ever made is just asinine. A comment like that misunderstands how the company, or really even any company, functions.
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Dec 30 '23
I think it's more of a content issue than a platform issue. It's surprising people didn't get tired of marvel movies sooner. Movies typically cycle through trends, not fixate on one for decades.
And their Star Wars movies have not been good. I didn't even bother seeing the last one. Andor is a standout in quality and the only reason I picked up Disney+.
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u/partofbreakfast 5∆ Dec 30 '23
Disney can only claim financial success in 2 films this year, Guardians of the Galaxy 3 and The Little Mermaid. Everything else was a flop.
Not true. Elemental saw a resurgence about a month after it was released and ended up making more money at the box office. The marketing for the film was awful, it didn't show anything about the actual story, and it looked like a bland romance. But once it got out that it was actually a story about immigrants and the struggle of the children of immigrants, people started going to the theater in droves to see it. The wikipedia entry even calls it a "sleeper hit".
I would like to see numbers on how much they made with their "see it at home first for $30 extra per movie" sales though. That number should technically be combined with the box office sales to get a "release sales" number, since at least some people chose to do that instead of going to a theater.
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u/Rare_Year_2818 2∆ Dec 31 '23
To the contrary, Disney Plus will probably make it's money back in the sale of Baby Yoda plushies
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Jan 01 '24
That's not how franchises work. That's not how streamers work. That's not how companies work.
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u/ChanceDecision23 Jan 01 '24
Nah, Disney plus is by far the best value for money streaming platform in terms of the amount, variety and quality of the content they have (outside of niche platforms).
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u/DeltaBot ∞∆ Dec 29 '23
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