3 lessons from the success of Disney+ you can use to grow your business
Told via Star Wars metaphors
We all like to think the disruptors will inherit the earth. Yet there is often something incredibly powerful in a legacy incumbent that has the power to constantly reinvent itself. We have a lot to learn from the launch and growth of Disney+. While the jury’s still out on the winners of the streaming wars, it’s safe to say Disney is leaving it’s mark on the battlefield.
1. Have faith. But also, have Marketing
Launched in Nov 2019, by March 2021 Disney+ had amassed 100M subs.¹
It took Netflix 10 years² to hit that number.
While that is certainly a testament to the power of brand and content.
It’s also a testament to the power of marketing dollars.
Consensus appears to be that Disney invested over $250M in US and Canada alone in Q4 2019 to market Disney Plus. That’s just above the line (ATL) spend — billboards, TV, the stuff we can count. It excludes any digital subscriber acquisition costs — SAC or performance marketing — that was shelled out across social channels to convert passive leads into subscribers. That would make it Disney’s biggest single campaign to date.
But they didn’t stop there. In 2020 Disney poured $525M¹ into marketing the product. Almost all of it went exclusively into social channels as performance marketing. In fact, Disney was Facebook’s largest advertiser in the first 6 months of 2020. That’s on top of the overall ad budget for all of Disney’s films, products, parks and experiences, which is well over $3billion.⁴
Disney built a great product, lined up an impressive content pipeline, and secured talent to support their launch. But they didn’t stop there. They put in the hard SAC to convert all that effort into results.
They didn’t rest on their laurels.
2. The empire needs alignment
I remember being interviewed for my first move studio role in 2009 in the UK and being asked ‘do you think we should launch an OTT product.’ That question has been on the mind of every media executive for more than a decade. Yet big ideas often take time to settle.
Disney’s existential pivot into OTT was only possible because Disney aligned its leadership team and 200,000+ employees around a single, simple priority.
A single, simple idea.
That single, simple idea was that Disney+ had to succeed.
Period.
This was both ruthless and effective.
Disney theme parks have more buses than the city of St. Luis,⁶ and every single one was advertising Disney Plus. Disney store employees all had laynyards with a QR code that would direct customers to the Disney Plus app upon scanning. Films intended for theatrical release got redirected into digital exclusives. Fresh content was held back from linear as further Disney Plus exclusives. The flashiest scripts became Disney Plus Originals. For an organisation with a heritage in the silver screen this was a massive leap.
And they did it without flinching.
They became an unstoppable force.
Many dream of this kind of alignment. Few achieve it.
3. The force is with Subscribers, not ARPU
Disney is the strongest content producer in the world. It’s batting average for hits is second to none. They own the majority of the world’s must have franchises. Its portfolio is nothing short of marvellous.
You could say they have a must have offering.
Yet Disney Plus launched with a price tag of just $7 a month.
On the annual plan that came down to $6 a month.
For a 3-year plan, that was as low as $4 a month.
You could imagine the chorous of compalints from internal stakeholders — “We can’t devalue our brands like that!” “We’re cannibalising our theatrical revenues!” “That risks our affiliate business!”
What’s going on?
Disney could have easily gone for a higher price close to the Netflix $12.99. Possibly more, taking the HBO approach, and going after a premium market.
But they didn’t.
They made a different choice.
To make the sign up decision for a subscriber an absolute no brainer.
That’s all that mattered.
How can you turn down $4 a month from the most attractive content producer in the world.
Will the price go up? I’d be surprised if it doesn’t. But only once Disney’s taught you to buy content from them digitally.
Reframe the product
Disney did what it did with Disney Plus because content is only one element of their flywheel. Monetisation is driven systematically through its complex ecosystem spanning multiple continents and categories. Building a system to build, hold and capture customer attention and passion creates value in far more sustainable ways than dominating a single category ever could.
And it’s a lot more fun.
Think of your products as gateways. Look beyond them to create value. New opportunities will present themselves.
References:
¹https://www.alistdaily.com/media/disney-plus-ad-spend-surges-158-percent-yoy/
⁴ https://www.statista.com/statistics/685554/walt-disney-ad-expense/
⁵https://www.macrotrends.net/stocks/charts/DIS/disney/number-of-employees
⁶ https://www.nytimes.com/2019/10/27/business/media/disney-plus-marketing.html
