Disney + was the future. Now it’s disney’s gift

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Iger was right that Disney + was a significant change in the direction of the nearly century-old entertainment business. But he was wrong about one thing: Disney + is not the future of Disney. It is the present.

The service is celebrating its first anniversary on Thursday and it has already become the center of Disney’s media kingdom. He’s racked up over 60 million subscribers (a long-term goal he hit in just nine months), hosted content that was nominated for 19 Emmys and introduced the world to the cutest baby in the galaxy. .

While the rest of society has been hampered, Disney + has thrived.

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As consumers were stuck at home, the service – home to beloved brands like Disney Animation, Marvel Studios and Star Wars – was pushed to “absolute number one in the business,” according to Jeffrey Cole, director of the USC Annenberg Center for the Digital Future.

“It became the central part of Disney,” Cole told CNN Business. “Most of us predicted that it would take two or three years to reach those subscription levels, to be this central, to be a major source of income, to be part of the culture – and it happened. in a few months because of the pandemic. “

The amazing growth of Disney + has also pushed the company towards its streaming future much faster than initially anticipated. Disney announced a reorganization of its media and entertainment business earlier this month to “further accelerate” its streaming strategy.

The pandemic has forced Disney to “pivot faster,” said Trip Miller, Disney investor and managing partner of hedge fund Gullane Capital Partners.

“Disney + was the only shining star in the Disney empire in 2020,” Miller told CNN Business. “The advent of the Disney + platform couldn’t have come at a better time.”

In a way, the stars have aligned. As Miller said, “It sounds like half the luck and half the brain, timing wise.”

Until 2021 and beyond

Despite the huge success this year, Disney + still has a long way to go before it is profitable.

Disney + could end up losing $ 2 billion to its parent company this year and an additional $ 2.2 billion in fiscal 2021, according to estimates by media research firm MoffettNathanson. We’ll find out more on Thursday afternoon when Disney reports on its quarterly finances.

Disney expects its service to become profitable in its 2024 fiscal year. Michael Nathanson, media analyst and founding partner of MoffettNathanson, agrees.

“I think Disney +, and the rest of their direct-to-consumer assets like Hulu and ESPN +, are the most important units for investors,” Nathanson told CNN Business. “It is a source of long-term growth and makes it possible to compensate [factors like] cord cuts and changes in audience behavior. “

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2024 is far from here, especially as the company is fighting battles on several fronts. And most importantly, its theater divisions and parks are still besieged by a pandemic that doesn’t seem to be slowing down any time soon.
While concerns remain about Disney + creating enough content to feed consumer appetites, as well as the ever-present competition from rivals like Netflix (NFLX), The first year of Disney + is a huge success.

This not only helped keep Disney afloat through the toughest years, but also quickly bridged the gap between what Disney is and what Disney will become.

“They really are all now,” Nathanson said. “Disney built a lifeboat that allows them to weather the current storm in mainstream media.”

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