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arnoldkwong7
Sep 22, 20212 min read

Another Category Killer - Disney

Updated: Jan 18, 2022

Amazon, by all measures, is an old tech company. Founded over 27 years ago, it started by disrupting the retail book marketplace. Books and B-school articles later Amazon is still disruptive. It’s disrupting business in an “Alien” category, invading

It's hard to tell how much of the Covid-recovery money for the Federal Government was spent “online” for streaming entertainment, retail-mental-therapy, or every-day shopping that moved from physical retail to cyberspace. Nevertheless, adoption of these mediums rose dramatically during the Pandemic. Take the growth of Disney+ for example.

In early 2019 a financial analyst forecast Disney+ subscriptions at 13 million by the end of 2020 and 50 million across Disney+, Hulu, and ESPN+. At the low end the financial forecast was for 60-90 million subscribers by 2024 (5 years). Disney+ “could be” profitable by 2024. Disney’s own ‘guidance’ was similar.



Millions of Subscribers


Hitting the “skip commercial” button to December 2020 the Disney “guidance” for 2024 pointed to 230-260 million subscribers just for Disney+, analysts projecting Hulu at 66M and ESPN+ at 18M, and a combined portfolio of 300-350 million.




Millions of Subscribers


In 12 months, Disney+ had gone from nothing to a December 2020 total of 86.8M Disney+, and adding the 11.5M ESPN+, 38.8M Hulu, for a total of 137M paying subscribers. In 2021Q3 the total reported by Disney+ was 116M, Hulu 42.8M, and ESPN+ had 14.9M totaling 174M subscribers. A new “guidance” was for 194M subscribers by 2025. Instead of stating that Disney+ “could be” profitable by 2024.


Millions of Subscribers


The achievement of five-year goals in a year point to permanent changes in consumer spend, Disney investments, and permanent changes in industry structure. Major expenses anticipated to “build the brand” and “sell the services” have been avoided. For context, at the end of FY2021 Q2 Netflix had 209M subscribers, Comcast/Peacock had 20M active monthly accounts reported 2021 Q2.


The Disney+ launch is an example (with a lot of luck for timing) of permanent changes in the economy. Enterprise-Aliens (that we define to be well funded, well managed, and proven highly effective enterprises that can adapt and effect changes) are coming to new markets and changing landscapes. This is occurring in entertainment (and clobbering the satellite/cable industry), work-at-home (commercial real estate, business travel, sales/marketing), leisure/hospitality (vacations), and residential real-estate (home sales/building/remodeling).


Aliens (people outside the industry) are coming for traditional players in major industries. Amazon is killing grocery delivery, Zoom is killing air travel, Disney is killing theaters, and Cable TV, there are other aliens coming for other markets. Are they coming for your industry? Let’s talk.


References


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