A Lot Riding on ‘Disney Plus’ Unveiling

NEWS ANALYSIS – Much like Apple’s recent Apple TV+ media event, Disney’s April 11 investor unveiling of its branded Disney+ subscription streaming service promises to be the digital media story of the day.

CEO Bob Iger has said the over-the-top video product slated to launch in November is the media giant’s top priority in 2019.

In short, Disney is betting billions on the distribution channel – a strategy that included removing branded content (and sacrificing millions in license revenue) from pay-TV operators, Netflix and even theatrical.

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Disney got the ball rolling in 2017 when it acquired backend streaming provider BAMTech from Major League Baseball Advanced Media for $2.5 billion. The company has powered numerous OTT services, including HBO Now, MLB.tv, PGA Tour Live, ESPN+, and NHL.tv, among others.

That acquisition, in addition to investment in ESPN+ and Disney+ resulted in an increased fiscal loss of $136 million in the most-recent fiscal period for Disney’s direct-to-consumer & international segment. That compared to a loss of $42 million during the previous-year period.

The DTC segment generated a fiscal loss of $738 million in 2018, up from a loss of $284 million in 2017.

Disney needs Disney+ to succeed where its previous OTT attempt, DisneyLife, has stumbled. The $13 monthly SVOD service launched in the U.K. in 2015 and briefly in China before being shut down there by the government.

DisneyLife in the U.K. reportedly has been challenged by a lack of original content and branded movies licensed to third-party distributors such as Sky. As a result, Disney is holding back current theatrical hit Captain Marvel from the pay-TV window for Disney+.

“In all cases, the results [for DisneyLife] were bleak,” according to Bernstein Research as reported by The Wall Street Journal. “It might even be described as a ‘failure.’ ”

Regardless, Disney+ plans to launch anchored by the “Star Wars” and “High School Musical” franchises. Jon Favreau is directing a Star Wars spin-off series, “The Mandalorian.” A series based on Monsters, Inc. is in the works as well.

Interestingly, Kenny Ortega — producer/director of “High School Musical” — just signed a production deal with Netflix.