“We launched the service last year with great ambition and high expectations,” Disney executive chairman Bob Iger told investors. “And we’ve exceeded them by every measure.”
The company is so confident about the service’s prospects, it announced it will raise its price to $7.99 per month beginning in March.
The presentation was a kind of rebuff to those who think Disney has been one-upped in the digital world by Netflix. That company has sought to position itself as a go-to for digital content but does not, Disney argued Thursday, have the brand reservoir or consistent glossy production that it does.
From a subscriber standpoint, Netflix is still winning the streaming wars, with nearly 200 million global subscribers. But Disney chief executive Bob Chapek said Thursday that Disney Plus, launched 13 months ago, has 86.8 million subscribers, demonstrating a company that is closing the gap and pulling away from the pack. No other service comes close; HBO Max, Warner Media’s service, has about 8 million unique subscribers.
The 86.8 million marked a 13 million subscriber increase over the past month, fueled by a launch this quarter in Latin America.
Also in the Star Wars — and retort — department: The company announced it has hired Patty Jenkins to direct “Rogue Squadron,” a new theatrical movie for 2023 from its Star Wars-centric Lucasfilm division. Jenkins’s “Wonder Woman 1984” was recently moved by Warner Bros. to HBO Max, one of 18 films over the next year that the company says it will debut on the service in a move that was widely interpreted as forsaking theatrical performance.
Disney’s move seemed designed to tell the AT&T-owned WB that it still believes theatrical showings will be around in three years, and that Patty Jenkins would rather work for them to serve it.
Kathleen Kennedy, who runs Lucasfilm, told investors the movie will focus on a “new generation of starfighter pilots as they earn their wings and risk their lives in a high-speed thrill ride." She suggested it is theaters that would be the best place to experience it.
At a time when theaters are in question, Disney noted an array of movies that it plans still to release in them — Marvel chief Kevin Feige, for instance, said that a "Black Panther” sequel that will pay tribute to the late Chadwick Boseman will arrive in theaters in July 2022. It moved only one of its 2021 films, a lower-profile animated one titled “Raya and the Last Dragon,” scheduled for March, to Disney Plus.
But the company did suggest some of its movie divisions will be adding streaming to their portfolio. Hulu, executives said, will start serving up original films produced by its 20th Century Studios and Searchlight divisions. Previously both divisions had been focused primarily on theatrical releases.
Chapek acknowledged that coronavirus challenges and “changing consumer behavior” could affect theatrical business and noted that “of the 100 new titles announced today, 80 percent” of them would go digital first.
“But we had $13 billion of box office last year and that’s obviously not something to sneeze at,” he said. “For us, it’s about balance.”
Disney made headlines at the start of the presentation by noting 10 new series each for its Marvel and Star Wars franchises and a combination of 30 movies and series from its Disney studio and animation operations, all aimed at Disney Plus.
But once its 20th Television Studio, FX, Searchlight, National Geographic and ESPN services are factored in, appearing on Hulu and ESPN Plus, the real number is much greater. There are hundreds of new shows and movies that seek to ensure Disney Plus (and theaters, when they return) is not just a place for endless re-watches of “Frozen” and its library, but a venue to get reams of new content, even if much of it is a spinoff of old content.
A sequel of the “Sister Act” movie franchise will sit alongside a series based on the “Moana” movie, which will be complementary to an Obi-Wan Kenobi spinoff.
Disney also said it had announced a deal with Comcast, which owns Disney competitor NBC Universal, to make Disney Plus available on Xfinity, highlighting how important even rivals believe Disney content to be.
“You can surely understand why we’re so excited and so optimistic about the future of the Walt Disney Company,” Chapek said.
Investors were feeling equally heartened, sending the stock price up 4 percent over the course of the presentation.
But questions still hover over the company.
Executives nodded occasionally to the coronavirus — Walt Disney Television entertainment chairman Dana Walden noted some production delays on a few of its shows due to the virus — but mostly avoided discussing the pandemic, which has ravaged its theme-park and theatrical business and sent revenue plummeting.
The company lost more than $1 billion at its parks and is poised to take in a tiny fraction of its 2019 box office this year.
And Disney Plus still won’t achieve profitability for three more years, raising questions about when the investment will begin repaying the massive amount Disney has spent on it.
As he has from the beginning, Iger emphasized “quality, not volume" in its digital approach, differentiating it from Netflix. But as the evening wore on it became clear that the volume was still great, a fact Iger seemed to realize as well.
“The pipeline of original content we’re making is much more robust than originally anticipated,” he said at the end of the presentation.
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