Disney+ Bulks Up On Streaming Content As It Hits 86M Subscribers

The Mandalorian and Grogu
Disney+/2020 Lucasfilm Ltd.

Disney unfurled a number of big streaming announcements during its four-hour investor day on Dec. 10.

When Disney first laid out its streaming strategy during an April 2019 investor day, it forecast that it could attract a whopping 60 million to 90 million subscribers to Disney+ within the service's first five years. In a follow-up presentation on Dec. 10, the company revealed it had reached the high end of that range in just 13 months.

Disney+ had 86.8 million subscribers as of Dec. 2, CEO Bob Chapek told investors at the beginning of the four-hour investor day presentation, which promised to offer a flurry of news about the company's streaming future.

True to its word, Disney used its time before investors and press to unleash a torrent of programming announcements that showed off the scope of the empire that executive chairman Bob Iger has built over the last 15 years. Disney has set a goal to release 100-plus new titles for Disney+ subscribers each year, Iger said during the presentation. Though it hasn't yet met that goal, Disney did spend much of its Thursday presentation touting some 100 original shows and films, most of which will be on Disney+ in the coming years. Among those projects will be 10 Star Wars series and 10 Marvel series, as well as 15 live-action and animated films on the platform.

In addition to the projects made specifically for Disney+, the company will also release some high-profile films directly on the streamer,  including a live-action PinocchioPeter Pan & Wendy, Enchanted sequel Disenchanted, Sister Act 3 and Pixar's Raya and the Last Dragon.

Across Disney's direct-to-consumer businesses, the company expects to spend between $14 billion and $16 billion through 2024. That's a huge investment for Disney as it looks to take on streaming giant Netflix, which is expected to release more than 400 English-language originals this year, per Whats-On-Netflix.com.

Though the company's studio arms are working in overdrive to stock Disney's direct-to-consumer platforms and linear television networks with programming, Iger maintained a commitment to the final product. The former CEO, who stepped down in February, has been focused on content creation within the organization in recent months. The company's emphasis, he said, "will always been on quality, not volume."

Disney launched Disney+ on Nov. 11, 2019, with much fanfare promising to offer a low-cost streaming option for families and genre fans. Though the new service was light on original programming, Star Wars series The Mandalorian — and a certain child — became an early draw, helping propel the service to more than 10 million sign-ups in its first 24 hours. The service now serves as the backbone of a multipronged streaming strategy for Disney, which also includes U.S.-only general entertainment service Hulu and sports-focused ESPN+.

Disney has 137 million paid subscribers across all of its direct-to-consumer services, including nearly 39 million Hulu subscribers and 11.5 million ESPN+ subscribers. The company has set a goal of between 300 million and 350 million total subscribers by 2024, driven by a new forecast of between 230 million and 260 million Disney+ subscribers.

To bolster its streaming business, Disney revealed Thursday that it is unveiling a new streaming-first brand that will serve as the home of its general entertainment programming around the world. Beginning in February, Star will become a new content hub within the Disney+ app in Europe, Canada, Australia, New Zealand and other countries. It'll also launch as a standalone streaming service, Star+, in Latin America.

In markets where Disney+ will add Star programming, the price of the service is expected to increase by around two euros. In the U.S., where Disney+ and general entertainment service Hulu will remain separate products, Disney+ will get a $1 price increase in March, bringing its cost to $8 per month.

Though streaming remains a costly business for Disney — the direct-to-consumer division lost $2.8 billion in 2020 — the company couldn't have picked a better time to shift its priorities from legacy distribution methods. Just five months after the launch of Disney+, the U.S. and much of the world were plunged into a new reality as the coronavirus pandemic upended life. Disney was forced to suspend production on many of its upcoming film and TV projects, shutter its theme parks and put the global release of $200 million tentpole Mulan on hold.

Through the turbulent and unpredictable year — in which the company enacted pay cuts and laid off thousands of employees to stanch the losses — Disney+ has remained a bright spot. Over the summer, it became the home of Mulan and a filmed version of the Hamilton Broadway musical. It will soon exclusively host Pixar's Soul, which had originally planned for a Christmas Day theatrical release.

But while rival WarnerMedia has responded to the pressures from the pandemic by moving its entire 2021 film slate to HBO Max, Disney didn't follow in its footsteps on Thursday. Upcoming Marvel film Black Widow, for instance, is planned for a May 7 theatrical release. The one exception is Raya and the Last Dragon, which will hit theaters and Disney+ simultaneously in March. For the Walt Disney Animation Studios picture, the company plans to charge an additional fee to watch the film on Disney+. It released Mulan in a similar way in August, charging $30 in what it dubbed a Premier Access window.

In a post-presentation Q&A, Chapek explained that the company built its biggest franchises "through the theatrical window" and would remain committed to that distribution strategy.

Still, over the coming years, Disney's direct-to-consumer platforms will become the home to some of the company's most coveted IP. Two Mandalorian spinoffs from Jon Favreau and Dave Filoni, a Lando Calrissian series from Justin Simien, musical series centered around Disney Princesses Tiana and Moana, a remake of Three Men and a Baby starring Zac Efron, a biopic about Chris Paul, an unscripted series starring Chris Hemsworth, a Swiss Family Robinson remake from Ronald D. Moore and a Guardians of the Galaxy Holiday Special are just some of the many new projects in the works for Disney+.

Hulu, meanwhile, is getting a new Kardashian-Jenner reality show and ESPN+ will exclusively debut Tom Brady docuseries Man in the Arena.

In a nod to the nearly 100-year-old company, Chapek ended the presentation by declaring that the streaming path Disney has set before it will help it "achieve even greater success as we enter our second century."