June 14, 2021
For Bob Chapek, what’s old is new again.
Before Chapek become CEO of The Walt Disney Co., he was president of Walt Disney Home Entertainment and driver of a successful packaged-media marketing program that created demand for select Disney classic titles by keeping them temporarily unavailable via the “Disney Vault.”
Flash-forward to the present and Chapek has been focused in part on expediting Disney’s direct-to-consumer retail and streaming access. Speaking June 14 on the virtual Credit Suisse 23rd Annual Communications Conference, Chapek said the DTC business strategy — similarly to home video and transactional VOD in the past — is about getting closer to the consumer.
Disney’s DTC unit includes streaming video services Disney+; Disney + Hotstar; ESPN+; Hulu; and Star+. The segment had more than 103 million combined subscribers, and posted revenue of $3.5 billion in the fiscal first quarter, up 73% from the previous-year period.
“It’s about having a granular understanding of what the consumption patterns are, and then speaking to the consumers in a way that’s going to be relevant to the content that they want specifically for themselves,” Chapek said. “And by doing so, we’ll drive engagement and consumption.”
Disney+ has taken baby steps into premium VOD, dubbed “Premier Access,” enabling Disney+ subscribers early access to select movies priced at $29.99 purchase-only price. Subsequent retail channels include transactional VOD, electronic sellthrough, DVD and Blu-ray Disc.
“In terms of the relationship that we have with our distribution partners, the key is having a strong symbiotic relationship, and that’s what we’ve got, as they really want Disney content and we bring that value to their platform,” Chapek said.
“So as long as we have a symbiotic relationship, where we bring something they need, we get something that we need. It’s a healthy relationship. And with the wide variety of content that we have in our machine, I think we’ll continue to have that very positive, very productive, very symbiotic relationship.”
When asked whether Disney might separate select Disney brands such as Marvel and Star Wars into standalone streaming platforms, Chapek said the aggregated business model, including combining Disney+, ESPN+ and Hulu into a specially-priced combo offering, is working.
“There is sort of a large overlap between people that like Marvel versus people that like Star Wars and people that like Disney,” he said.
“We won’t say no to anything in the future, but right now we’re really happy with our more highly aggregated model that we have, both from a cost standpoint and from a market opportunity standpoint. But again, who knows it could evolve over time as we learn more and more in different regions across the world.”