Disney Exploring Membership Program Combining Streaming, Theme Parks, Consumer Products

The Walt Disney Co. is reportedly considering offering consumers a branded membership program that would meld its Disney+ streaming video platform with theme parks, resorts, consumer products and other company businesses.

First disclosed by The Wall Street Journal, which cited internal sources, the membership plan would try to emulate the Amazon Prime concept that affords members with free access to streaming video, music, reading, games and two-day shipping, among other perks.

The unnamed plan is still in its infancy but seeks to cross-promote Disney brands to consumers, while softening the escalating retail price of some individual properties such as the admission price to Disneyland.

“Technology is giving us new ways to customize and personalize the consumer experience so that we are delivering entertainment, experiences and products that are most relevant to each of our guests,” Kristina Schake, senior EVP and chief communications officer at Disney, said in a statement. “A membership program is just one of the exciting ideas that is being explored.”

While recent price hikes at Disney’s theme parks led to record quarterly operating profit ($1.65 billion) and revenue ($5.42 billion) despite lower attendance, the membership program, for example, could offer hotel, food and parking discounts.

Membership programs aren’t new to Disney, which has long offered consumers annual passport options to theme parks. The company currently markets the annual D23 Official Fan Club platform (priced from $99.99) that affords consumers access to exclusive events, merchandise and three-year membership to Disney+.

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In December, Disney will roll out its previously announced Disney+ price hikes and ad supported SVOD option (Disney+ Basic), upping the Disney+ Premium (without ads) monthly fee three dollars to $10.99 and $109.99 annually. The ad-supported Basic plan will cost $7.99 — the same price as the current Disney+ subscription fee.

“With our new ad-supported Disney+ offering and an expanded lineup of plans across our entire streaming portfolio, we will be providing greater consumer choice at a variety of price points to cater to the diverse needs of our viewers and appeal to an even broader audience,” Kareem Daniel, chairman of Disney Media & Entertainment Distribution, said in a statement last month.

Disney Extends CEO Bob Chapek’s Contract Three Years, Includes $20 Million Annual Bonus Incentive

In a major show of confidence, The Walt Disney Company’s board of directors June 28 extended CEO Bob Chapek’s term of employment agreement for three years, beginning from July 1.

The employment agreement will be amended to provide that Chapek will be granted a long-term incentive award having a target value of not less than $20 million annually. The proportion of his long-term incentive award comprised of performance-based restricted stock units will be increased to 60%.

Disney said the largely stock-based bonus incentives do not guarantee Chapek any minimum amount of compensation. The actual amounts payable to the former home entertainment executive in respect of such opportunities will be determined based on the extent to which any performance conditions and/or service conditions applicable to such awards are satisfied and on the value of the Disney’s stock.

Indeed, Chapek may receive compensation in respect of any such award that is greater or less than the stated target value, depending on whether, and to what extent, the applicable performance and other conditions are satisfied, and on the value of the media giant’s stock.

The new employment contract does not alter Chapek’s existing employment agreement, including his $2.5 million base salary.

Since being named CEO in February 2020, Chapek has weathered a pandemic, political issues in Florida, mixed up the theatrical window and help broaden the reach of the Disney+ subscription streaming service globally, among other accomplishments.

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Disney Board Backs Bob Chapek Following Executive Ouster

Disney’s board of directors issued a formal vote of confidence for CEO Bob Chapek after the former home entertainment executive abruptly fired Peter Rice, the media giant’s TV boss. Rice, who came to Disney in the $71.3 billion Fox acquisition, was reportedly seen as a possible successor to Chapek, whose contract comes up next February.

In a statement, Disney board chairwoman Susan Arnold said the strength of The Walt Disney Company’s businesses coming out of the pandemic remain a testament to Chapek’s leadership and vision for the company’s future.

“In this important time of business growth and transformation, we are committed to keeping Disney on the successful path it is on today, and Bob and his leadership team have the support and confidence of the board,” Arnold wrote.

The vote of confidence comes as Disney’s stock remains at a two-year low, and Chapek deals with the fallout of his controversial handling of Florida’s Parental Rights in Education legislation. Florida lawmakers have passed legislation that would strip Disney of its 55-year-old self-governing status in the state next year.

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Interpret: Disney+ Subs More Amenable to Ad-Supported Content

Disney+ subscribers are more amenable to ad-based content than the general population, according to Interpret data, making the company well-positioned as it plans to introduce a lower-priced, ad-supported subscription tier for its digital streaming video service.

Interpret’s VideoWatch data shows that 55% of Disney+ viewers are already consuming content on ad-supported services, compared with 44% of the general population.

“When Disney first entered the subscription OTT space, it redefined the benchmarks for success for a new streaming service,” Brett Sappington, VP at Interpret, said in a statement. “Prior to its entry, companies were pleased to exceed 1 or 2 million subscribers. When Disney was able to quickly capture millions of customers, they set a high bar for others to reach. The same could happen in the ad-supported streaming space as well. With its large current subscribership, a known content brand, and existing relationships with advertisers through its television business, Disney+ is well positioned for success with an ad-supported tier.”

Disney to Pause All Business in Russia in Response to Ukraine Invasion

The Walt Disney Company March 10 announced it would expand its pause of business dealings in Russia in response to the country’s attack on Ukraine. 

“Last week, after Russia’s unprovoked invasion of Ukraine, we announced that we were pausing the release of theatrical films in Russia and reviewing the rest of our businesses there,” said a spokesperson for the Walt Disney Company. “Given the unrelenting assault on Ukraine and the escalating humanitarian crisis, we are taking steps to pause all other businesses in Russia. This includes content and product licensing, Disney Cruise Line activities, National Geographic magazine and tours, local content productions and linear channels.

“Some of those business activities we can and will pause immediately. Others — such as linear channels and some content and product licensing — will take time given contractual complexities.

“Even as we pause these businesses, we remain committed to our dedicated colleagues in Russia, who will remain employed. And we continue to work with our NGO partners to provide urgent aid and other much-needed assistance to refugees.”

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Sony Pictures, Disney, BBC Studios Join DEG International

The Digital Entertainment Group International (DEGI) Feb. 23 announced that BBC Studios, Sony Pictures Entertainment and The Walt Disney Company, EMEA, have become members of the global arm and sister body to the U.S. based DEG: The Digital Entertainment Group (DEG).

The companies join existing DEGI members Google, Lionsgate, Paramount Pictures, Universal Pictures and Warner Bros. Pictures.

Joe Braman, co-chair of the DEGI, said 2022 promises to be a global renaissance for home entertainment, with the DEGI and DEG supporting the missions of stakeholders and driving common agendas for category growth.

“The DEGI welcomes these three new members and their engaged membership at such an exciting time for the category,” Braman said. “As the surge in new content continues across the next six months, their experience and ambition will be a huge benefit to our collective goals.”

In the United Kingdom, more than 30.1 million VOD movie rentals were recorded from January through October 2021, as well as 17.7 million digital and physical transactions, despite ongoing supply chain issues. The final week of 2021 saw the biggest uptick in digital movie sales in the United Kingdom since records began.

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Laura Broadbent, project director, transactional digital acceleration program at Sony Pictures Entertainment, believes that the evolving consumer appetite for digital content is at the heart of movie and TV consumption going forward.

“This presents a phenomenal opportunity for growth across international territories,” Broadbent said in a statement.

Broadbent credited the DEGI with providing the studio with a strong platform for collaboration through the sharing of research, insight and knowledge, which, she says will enable Sony to help its audiences understand how and where they can rent or buy the wealth of content available to them.

Johnnie Thompson, director of digital stores for EMEA & Russia at The Walt Disney Company, said the consumer base is more than subscription VOD.

“With almost 18 million digital purchases in the U.K. alone in 2021, the category continues to thrive,” Thompson said. “So, it’s essential that we come together as an industry to share our knowledge and expertise to drive the digital category forward, and DEGI provides a great platform to do just that.”

Disney Extends CFO Christine McCarthy’s Employment Contract Into 2024

The Walt Disney Co. Dec. 21 announced it has extended CFO Christine McCarthy’s contract through June 30, 2024. McCarthy is a 22-year veteran of the company and has served as CFO since 2015.

“Christine’s leadership has been indispensable during this time of disruption and transformation, and her impact reaches well beyond our balance sheet,” CEO Bob Chapek said in a statement. “She has been instrumental to Disney’s growth and helped us navigate the most difficult days of the pandemic.”

As CFO, McCarthy oversees Disney’s worldwide finance organization, which includes brand and franchise management, corporate alliances and partnerships, corporate real estate, corporate strategy and business development, enterprise controllership, enterprise technology, financial planning and analysis, global product and labor standards, investor relations, risk management, tax and treasury.

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McCarthy joined Disney in 2000, and prior to becoming CFO she was EVP of corporate real estate, alliances and treasurer. She currently serves on the board of directors of The Procter & Gamble Company and FM Global, and is a trustee of Carnegie Institution for Science. She has received numerous awards and has been named multiple times to Treasury & Risk’s “100 Most Influential People in Finance,” the Top 100 Irish American Business Leaders, and Business Insider’s “The 15 Most Influential Women in Finance.” In 2015, she was the recipient of Treasury Today’s Adam Smith “Woman of the Year” award. In 2016, she received Los Angeles Business Journal’s “Executive of the Year” award and was honored as one of the Entertainment Diversity Council’s “Top 50 Most Powerful Women in Entertainment.”

Parrot Analytics: Disney+ Second Only to Netflix in U.S. Originals Demand

Disney+ is the second-most in-demand platform for original series with U.S. audiences. and The Walt Disney Company is in first place in corporate demand share, according to data from Parrot Analytics.

Disney+ became the second-most in-demand streaming service for original content with American audiences for the first time ever last quarter with an 8.9% share, leaping over longtime second place holder Amazon Prime Video with 8.6%, according to Parrot.

Disney remains far and away the top media conglomerate in the United States when it comes to corporate demand share — a consolidation of original demand where platforms are combined based on their corporate parent, according to Parrot. Disney’s 20.1% share last quarter was well ahead of second place ViacomCBS (13.1%). Disney’s share is larger than the combined share of WarnerMedia and Discovery (12.1% + 7.1% = 19.2%), which are in the process of merging. Collectively, the six largest media corporations control almost three quarters of U.S. demand for TV series, while 27.4% of audience attention goes to originals from other platforms.

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Parrot also found:

  • Disney is in second place in overall demand for original children’s content.
  • Disney+ and Hulu originals accounted for five of the six most in-demand new series released in the U.S. in the last quarter.
  • Disney+ accounted for four of the 10 most in-demand digital original series with both U.S. and worldwide audiences last quarter. 

ViacomCBS to Acquire Stake in Spanish-Language Content Producer

ViacomCBS Networks International (VCNI) has entered into a definitive agreement to acquire a majority stake in the Spanish-language content producer Fox TeleColombia & Estudios TeleMexico from The Walt Disney Co. and the founding family of Fox TeleColombia & Estudios TeleMexico.

ViacomCBS International Studios’ VIS, a division of VCNI, will operate Fox TeleColombia & Estudios TeleMexico as a collaborative partnership with the founding family. The transaction is subject to regulatory approval and customary closing conditions.

Through this transaction, VCNI will gain access to Fox TeleColombia & Estudios TeleMexico’s studio operations in both Colombia and Mexico, as well as many hours of library content, including premium series, telenovelas, films, documentaries, unscripted, kids and family, branded and digital content, and live sports shows produced for various audiences. This content will fuel ViacomCBS’s global streaming platforms including Paramount+ and Pluto TV, and its linear networks around the world, according to the company. Fox TeleColombia & Estudios TeleMexico will also bolster ViacomCBS’ Spanish-language content production capabilities to capitalize on significant content demand in the region and worldwide, the company noted.

“The acquisition of Fox TeleColombia & Estudios TeleMexico, combined with ViacomCBS’s existing Spanish-language portfolio including Telefe and Chilevisión, reinforces the company’s position as a leading worldwide producer of Spanish-language content,” Raffaele Annecchino, president and CEO, ViacomCBS Networks International, said in a statement. “This content will fuel ViacomCBS’ global ecosystem across Paramount+, Pluto TV and its linear networks.”

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“This announcement is very fulfilling and I feel very honored that Fox TeleColombia & Estudios TeleMexico will continue its expansion and growth in the hands of such an amazing company as ViacomCBS and its talented and visionary executives,” Samuel Duque Rozo, founder and CEO of Fox TeleColombia & Estudios TeleMexico, said in a statement. “The extraordinary work that our team has made during all these years, combined with ViacomCBS’s vision, iconic brands, experience, professionalism, creativity among much more, will bring nothing less but the best for both businesses.”

Rozo will continue to exclusively support the business from a creative and strategic advisory position, and Samuel Duque Duque, current president, will lead the business. Fox TeleColombia & Estudios TeleMexico will fall under the remit of Juan “JC” Acosta, President of ViacomCBS International Studios and Networks Americas.

The terms of the transaction were not disclosed.

Bob Chapek: Pandemic Brought Flexibility to Disney Content Distribution

As Hollywood puts the pandemic in the rear-view mirror, Disney, like other studios, has revisited its distribution strategy of original movies and TV shows. Speaking May 24 on the virtual JPMorgan 49th Annual Global Technology, Media and Communications Conference, CEO Bob Chapek said the pandemic put renewed focus on how consumers want to access content, rather than traditional norms revolving around the 90-day theatrical window.

“One of the things we learned is flexibility is good because there’s two dynamics going on: One is people’s willingness to return to theaters and theaters’ ability to return in a meaningful way,” Chapek said. “And then the second is the change in consumer behavior that’s happening naturally, with COVID probably acting as a bit of a catalyst, but was going to happen anyway.”

Disney is returning to the movie theater in late summer with exclusive (and curtailed) 45-day windows for 20th Century Studios’ Free Guy and Marvel Studios’ Shang-Chi and the Legend of the Ten Rings. Free Guy launches on Aug. 13 and Shang-Chi on Sept. 3. The films mark Disney’s first exclusive theatrical releases since the Aug. 28 release of The New Mutants.

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Other theatrical titles Cruella (May 28), Black Widow (July 9) and Jungle Cruise (July 30) will debut in cineplexes and on $29.99 Premier Access via Disney+ simultaneously.

“We’re trying to offer consumers more choice as they gain confidence in how they want to go ahead and return to theaters,” Chapek said, adding that consumer return to the box office has been stronger in select international markets.

“We’re seeing some hesitancy to return [to movie theaters] in a way that would look anything like normal back in 2019,” he said. “And as such, during this sort of interim period, it’s really nice to be able to give consumers some flexibility.”

Marvel Studios’ Black Widow

When asked why a theatrical tentpole title like Black Widow would get concurrent purchase access on Disney+, Chapek said the Marvel Universe movie, starring Scarlett Johansson, had been delayed twice — and a third delay was not an option.

“At the same time, we always knew that there was a risk that exhibition wasn’t going to be fully developed or that consumers wouldn’t want to go back and sit in the theater,” he said. “We realized we had to sort of ‘prime the pump’ and give theatrical exhibition a chance, but we couldn’t put all our eggs in the exhibition basket, because we knew that in the weeks leading up to the decision, the domestic market was not coming back and is still fairly weak. We’re really confident we made the right call there.”

Pixar Animation’s Luca

The June 18 release of Pixar Animation’s Luca direct to Disney+ without a $29.99 purchase fee, and bypassing theatrical surprised some observers. Chapek said the decision revolved around keeping Disney’s evolving distribution channels stocked.

“We’ve increased our investment in creative content to ensure that all channels have a full complement of offerings to sort of keep everybody happy,” he said. “We want to make sure, given the importance of Disney+ in the marketplace and our shareholders, that we keep feeding that machine.”

Indeed, Disney’s Christmas Day release of Pixar’s Soul was topped only by Warner’s same-day release of Wonder Woman 1984 on HBO Max.

“We believe that Luca will get a lot of eyeballs,” Chapek said.