Why Star is Disney’s next big save in its war with Netflix


The family-friendly Hollywood giant is betting that more adult programming will help increase subscribers, at the risk of brand confusion.

When Disney launched the Disney + streamer in November 2019, it drew on global recognition from Luke Skywalker, Iron Man, Moana, and Buzz Lightyear to great effect. The service attracted 95 million subscribers in just over a year. Soon, Disney will find out what happens when characters like Olivia Pope, Betty Suarez and Jack Bauer break their streaming party.

On February 23, Disney began adding more adult-inclined programming to Disney + in markets including Europe, Canada, Australia, and New Zealand under the new streaming brand Star. The entertainment giant’s plan to introduce Star as a hub of content within Disney + along with Lucasfilm, Marvel, Pixar and National Geographic is designed to help drive overseas enrollments, but it can also create confusion for the family-owned Disney + brand.

“Everybody knows about Marvel, Star Wars and Pixar, but Star is kind of nebulous general entertainment, so it’s much more difficult to have an obvious value proposition for people,” says Cowen entertainment and media analyst Doug. Creutz. “I don’t know if having Star will incentivize someone who wouldn’t have bought Disney + on their own to then go buy Disney +.”

In addition to the challenge, Disney plans to increase the price of Disney + to 8.99 in Europe and 7.99 pounds in the UK (both equal about $ 11) regardless of whether a subscriber intends to watch the new programming of Star, which will come from Disney. owned by ABC Signature, 20th Television, FX Productions and 20th Century Studios.

By offering Star programming within the Disney + universe in many markets, Disney is making the service a more direct competitor to Netflix, which, with hundreds of new releases each year, promises to have something for everyone. Disney is already fast catching up with Netflix, which took nearly a decade to amass a streaming subscriber base the size that Disney + has today.

Disney has also taken a page from Netflix’s playbook by investing in local content. On February 16, the conglomerate unveiled 10 European original series, spanning the genres of drama, comedy and documentary, including a four-part French miniseries about the death of a young student in 1986 and an Italian mob series told. from a female perspective. Disney + plans to order at least 50 European originals by 2024.

“Like a supercharged Netflix, they are following the same global strategy but are implementing it at a much faster rate,” says Guy Bisson of UK-based Ampere Analysis. “Netflix already has all of its subscriber growth, and 62 percent of its commissioned originals, coming from outside the US.”

Although Netflix continues to grow at a rapid rate, surpassing 200 million subscribers by the end of 2020, analyst firm Digital TV Research estimates that Disney + will overtake the streaming pioneer in paid members in the next five years. (Disney believes it will have between 230 million and 260 million paid subscribers by the end of fiscal 2024).

Disney has avoided combining family programming with more adult rates in the US, where Disney + operates as a separate service from the general interest streamer Hulu. But Jan Koeppen, Disney’s president for Europe, the Middle East and Africa, says a survey of subscribers showed that they actually wanted a broader content offering within the app. “They all said, ‘We love the choice.’ And the adults among them had a term they used often: ‘We’d love to have even more options’ for what they call ‘me time,’ the time the kids have gone to bed, “Koeppen explained during a February 17th. Press conference.

To take into account the wide range of viewers that might be accessing a household’s Disney + account, the company has strengthened its parental controls and will allow people to filter content based on age-specific content ratings.

Ampere’s Bisson sees a parallel between Disney’s global approach to combining Disney + and Star and its US strategy of bundling its various offerings – Disney +, Hulu and ESPN – into a single monthly discounted transaction. Bisson has called the strategy “capitalization” and expects other studio-backed streamers (WarnerMedia’s HBO Max, ViacomCBS’s Paramount + and NBCUniversal’s Peacock) will copy it as they launch around the world. “It’s basically about reinventing the wheel,” he says, “doing the same thing with broadcasting as pay TV and cable: bundling channels and services into one discounted package.”

Peter Csathy, president of advisory firm CreaTV Media, expects the launch of Star to mark only “the beginning of Disney’s expansion of its Disney + subscription streaming service,” and said: “Ultimately, Disney + will be the center of much more than videos. It will be home to all things Disney and will offer different levels of service that offer various benefits, including early admission to theme parks, ongoing Disney specialty merchandise and more. “

Disney had considered the introduction of Hulu as its mass market service around the world, but concluded that the US-based platform “has no brand awareness outside of the US,” according to CEO Bob Chapek. Meanwhile, Star takes its name from Star India, the media giant that Disney acquired in its deal with Fox and that operates the popular streaming brand Hotstar in India and parts of Asia. (The India Disney + Hotstar brand comprises approximately 30 percent of Disney + ‘s global subscriber base.)

But the launch of Star will be more complicated than the launch of Disney +. Star will not be offered in the US, for example, because Hulu already serves a similar function. Meanwhile, in Latin America, the service will be offered as an independent streamer called Star + and will include live sports. “They are trying to adapt the product to market as best they can,” says Creutz, “and it is definitely not a one-size-fits-all solution.

Georg Szalai contributed to this report.

This story appeared in the February 24 issue of The Hollywood Reporter magazine. Click here for subscribe.



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