Bob Iger’s Grand Streaming Vision Is Finally Coming Together

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As a long-time observer and enthusiast of the ever-evolving world of streaming, I find myself constantly intrigued by the strategic moves made by industry giants like Disney. The recent announcement of ESPN integration into Disney+ is a clear testament to their forward-thinking approach, one that I’ve come to expect from my years spent following this fascinating field.

Approximately a few months before Disney+ was launched in November 2019, Bob Iger offered financial analysts a straightforward explanation for why he intended to keep Disney’s new streaming service narrowly focused on family-friendly entertainment and well-known Disney brands like Marvel and Star Wars. Since Hulu and ESPN+ were already successful, he stated that instead of offering one large bundle containing sports, general entertainment, and family programming, it would be more beneficial for consumers if these categories were separated.

After five years, Disney continues to operate three distinct streaming platforms. However, as of this week, the era of strictly separating content by genre is now a thing of the past.

On Wednesday, Disney+ introduced an ESPN tile, enabling users who subscribe to ESPN+ as part of the Disney Bundle to stream all its content via the Disney+ app. This is similar to the Hulu on Disney+ initiative launched earlier this year, although there are some differences as noted by my colleague Savannah Salazar. With this launch, for the first time, anyone who subscribes to what’s known as the Disney Trio bundle can access the entire Magic Kingdom streaming library through a single app experience, eliminating the need to switch apps. The “huge combined bundle” that Iger once dismissed several years ago is now being celebrated by Disney as an integrated viewing experience, only possible with the offerings of The Walt Disney Company.

While it may appear as a significant shift in stance, I must clarify that times indeed evolve and so do companies’ policies. In comparison to Netflix’s recent about-face on advertising and password sharing, Iger’s evolution is almost imperceptible on the corporate hypocrisy scale. Moreover, it’s worth mentioning that Disney, for now, allows consumers the freedom to opt for more specialized streaming apps if that aligns with their preferences.

It’s not hard to understand why Iger and Disney chose to alter their strategy, and it certainly doesn’t come as a shock. One key factor is that, in 2019, Disney didn’t fully own Hulu; Comcast still held a stake, which would have made merging platforms more complex. Furthermore, at the time, Disney may not have had the technical capabilities to manage an extensive app that offered live sports, Hulu content, and the massive Disney+ library without causing significant increases in cost for existing Hulu customers who didn’t want Disney or ESPN programming. Iger’s cautious approach was likely the best decision under the circumstances.

Instead of combining services under one umbrella, Iger presented the Disney Bundle, allowing customers to pay for multiple services with a single bill, while still accessing each service through separate apps. This was beneficial in reducing subscriber turnover and enticing dedicated Disney fans to optimize their TV viewing experience. However, the main disadvantage of this approach has always been that, given the multitude of viewing options, if an avid Hulu user neglects Disney+ for a few days (or vice versa), they might feel undervalued and more inclined to downgrade or cancel their subscription.

It didn’t take long after the launch of D+ for it to become apparent that Disney executives would eventually adapt and create a streaming service equivalent to their iconic “E Ticket” attractions from their theme parks, which were popular until the mid-1990s. Given Disney’s knack for synergy, deeply rooted in the company’s DNA, it was only a matter of time before they found a way to consolidate their entire streaming content under one meticulously designed platform. This is why, when Disney began testing ESPN+ programming on Hulu (not Disney+) in 2021, I predicted that consumers might eventually have the option to stream all three platforms through a single app. Similarly, even before a year had passed since the debut of Disney+, I was already convinced of the necessity for a unified streaming experience via one application.

It’s reasonable that Disney wants Disney+ to mainly offer family-friendly content. However, why can’t shows like Black-ish or The Conners also be available on Disney+ alongside Hulu? I understand the need for parents to know that Disney+ is entirely kid-safe, but making consumers switch between three apps when they’ve already paid for the Disney bundle seems inefficient. It appears inconsistent to establish digital boundaries within the Disney streaming empire, considering all content originates from the same company.

As a keen observer, I must clarify that predicting the consolidation of Disney’s streaming apps isn’t like peering into a crystal ball; it’s more about paying attention to the chatter in the industry. For years, analysts, journalists, and even casual conversations with Disney insiders hinted at this move. The main debate was never about if, but when, and whether Disney would entirely phase out Hulu and force consumers into a single, expansive app. However, it appears that Bob Iger has chosen to offer consumers a choice instead, for now.

One App to Rule Them All?

In the next five years, it’s up in the air if Disney will continue to find it financially beneficial to maintain separate Hulu and ESPN apps and their respective infrastructures. Given that ESPN is planning a new premium app launch next year, which may carry a substantial cost, it appears that Disney will keep a sports-focused experience for a while. However, when it comes to Hulu, I’m hesitant to make predictions due to its history of being predicted to fail since the inception of Disney+. As my colleague Savannah notes below, this app has proven to be resilient, so it may not disappear as quickly as some expect.

Speaking as a Disney+ subscriber myself, one of the highlights from this week’s ESPN integration was the news that I, along with all other Disney+ users – whether we only have Disney+ or are part of a bundle – will now have access to a substantial amount of content from Hulu and ESPN at no additional cost. This includes acclaimed series like ‘Shogun’ from FX and popular shows like ‘Pardon the Interruption’, as well as countless live sporting events. As Disney+ president Alisia Bowen explained at a press event, this approach allows standalone Disney+ subscribers to get a taste of our extensive sports and entertainment content, making it easier for us to appreciate the full value of the bundle. If we enjoy what we see or want more, there will be simple ways for us to upgrade our subscription and access the entire content lineup.

Disney’s sampling strategy is somewhat similar to what Amazon Prime Video has been doing for some time with its channel store. In essence, Prime members often get access to entire seasons of shows on platforms like BritBox or MGM+. When it comes time to watch the next season, they are encouraged to subscribe to that specific service. Although some find this approach annoying and manipulative, it’s clear that it’s effective, as many streaming services continue to allow Prime to preview their content. Since upgrading from basic Disney+ to a duo bundle with Hulu only costs an additional $1 per month, this free programming could act as a strong incentive for users to upgrade.

Regardless if Hulu remains an independent app or not, Disney is determined to persuade a significant number of their existing Disney+ or Hulu individual subscribers to opt for a package that includes both services. This week’s events should greatly facilitate this objective.

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2024-12-06 22:54