Disney+ attracted over 14.4 million new subscribers last quarter. This figure, far exceeding analysts’ expectations, marks an important milestone: the joint offering of content in streaming Disney already has More subscribers than Netflix.

But these excellent results do not dispel the main doubt of investors: will Disney+ become profitable? Because, although it may seem surprising, a service where you can watch movies from popular franchises such as Marvel or Star Wars, a hole in your pocket for Disney.

Between Disney+, Hulu and ESPN+ Disney lost $1,100 million last quarter, despite making a lot more money with those 15 million extra subscribers. How is this possible? The cost of content and its production is rising. Disney already knew that the transition from traditional television to its own platform streaming it will be expensive, and he announced that Disney+ will start to turn a profit on its own starting in 2024.

And it’s getting harder to be profitable when most of your new subscribers come from India, where you’re offering cricket, the national sport, but Viacom18 is taking over the rights for next season. As if that weren’t enough, in the United States and Canada, Disney saw 5% less average revenue per consumer thanks to their opting for wider content offerings. Less revenue, fewer potential subscribers, and expenses that never stop growing. How to achieve profitability? resorting to advertisingwhich was a big announcement in the presentation of quarterly results.

Disney’s Price Trick

Disney says this new ad-supported subscription plan is a way to make its offering more flexible to better suit a diverse customer base. In fact, the company wants to earn a few extra dollars from each consumer in order to make the business profitable in the long run..

The basic US plan, which costs $7.99 per month, will now include ads, and subscribers who want to opt out will have to pay an additional $3. That is, the price of Disney + increases by 40%, but not directly. What used to be offered for 7.99 now costs 10.99. And those who don’t want to accept this increase will have the option to keep paying the same but sacrificing their experience with ads they obviously can’t miss.

Netflix announced identical strategy as soon as its growth began to slow down. The number of interested users is limited, but investors clearly want the income and profits of the company they entrusted with their money to grow. To do this, it is necessary to further increase the cost of a subscription or resort to advertising, as has always been done on traditional television.

When Netflix came out, all consumers were fascinated by this offer: for 10 euros a month they got access to a huge catalog of TV shows and movies that play where and when they want, without ads and through a fantastic app. It was an obvious qualitative leap, it attracted millions of subscribers and big investments.

Of course, many companies wanted to get into this lucrative business, and the rights to the content offered increased significantly. Every production company started launching their services and offerings, and Netflix had to resort to an ambitious original content strategy to position its service as essential and then raise the price. But there is a limit, and Netflix is ​​already approaching or exceeding it, as evidenced by its latest quarterly results. The last alternative is to increase your ads, even if it’s an extra dollar or two.income received on average per subscriber.


Relying on ads will cause other types of problems

If Disney+ starts to rely on ads, even if only partially, will face the problems that Google or Facebook are currently facing.. Instagram introduced short videos not with the goal of offering users a richer experience, but with the goal of increasing the time users spend swiping in the app.

This increases the time they spend watching ads. In the case of Netflix or Disney, the focus will not only be on getting the subscriber to pay every month, but also on getting them to spend as much time in the app as possible. More time, more income. And yes, a good series or movie can captivate viewers, but traditional television uses reality or cardiac programs to achieve this goal. Surely these services streaming end up resorting to similar content. Perhaps a live modality will be exploited, as already discussed, and this will make even more sense if part of the income comes from advertising.

One of the benefits for advertisers is that on the web, you can target ads based on your usage patterns, unlike traditional television. If a user has just watched a cooking show, Netflix might show them an ad for knives instead of an ad for face cream. The problem is that In Europe, these practices will begin to be prosecuted in 2024 with the entry into force of new digital rules for large technology companies.. In the not-too-distant future, the worst of the Internet and the worst of TV may come together on services like Disney+ or Netflix.


Netflix and Disney+ will become Telecinco and Antena 3

All companies will eventually do the same, as the supply of content is limited, as is the number of possible subscribers. And everything points to the end, just like traditional television. Instead of looking through four or five channels to see what interests us, we will open the apps of three or four services that we subscribe to.. Is there anything interesting on Netflix? Is the show being talked about on HBO twitter out yet? And, in addition to paying for each of them, we will swallow advertising. Like on TV, but without the ability to do disabled fast and paying eight euros a month for it.

TV revolution in streaming As a result, nothing much has changed, except for the diversity in the catalog and the possibility of consumption on demand.. Instead of connecting the TV to an antenna, we connect it to a network cable, but the operation seems to end up being the same.

This is something that is already happening with Uber, as these companies have stormed in with very attractive investor-sponsored offerings until it’s time to turn a profit. At this time, taking advantage of the fact that control has already been taken and the old leaders have been dismissed, favorable prices and conditions are being restored. Another example is Spotify, which now has to resort to ads embedded in podcasts.

In the end, revolution is nothing but the transfer of power. Podcasts are becoming radio programs, web3 is becoming more centralized than web2… Did anyone think that all these companies wouldn’t be doing the same thing that TV channels have been doing for 60 years? The business models will end up being very similar, but not to those who will profit from them.

Get your free Star+ trial and watch the final Formula 1 race

Source: Hiper Textual
Previous articleApple Watch Series 8 will have the best innovation of Samsung Galaxy Watch5
Next articleMegaFon stable connection all tourist areas on Lake Baikal


Please enter your comment!
Please enter your name here