We knew it would happen, but maybe not that it would happen that quickly: Disney Plus has overtaken Netflix to become the world‘s most subscribed video streaming service. And he did it in less than 3 years.
According to the data of the last quarterly (referring to the period April-June), Disney Plus now has 221 million subscribers: Netflix, which is just below this threshold, took 14 years to get there. The figure also includes subscribers to Espn Plus, Hulu and Hotstar, which are not available everywhere, but the result is still remarkable: as we wrote recently on Italian Tech, Disney Plus is the fastest growing platform, even in Italy.
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How did Disney Plus overtake Netflix
It happened mostly for 5 reasonssome dependent on the activity of Disney Plus and others related to how this market works: let’s see them in order.
Aggressive pricing and 4K for everyone
Coming last among the greats of television entertainment, Disney Plus has focused a lot on very, very competitive rates, even in Italy: in March 2020, when it arrived in our country, you could subscribe with 59.99 euros for one year, that is, spending less than 5 euros per month. That price then rose to 69.99 and is now at 89.90, which still remains 7.5 euros per month. To have a subscription to Netflix with the same characteristics, especially with the contents in 4K resolution (which on Disney Plus is immediately available for everyone), it is necessary spend more than double.
May the force be with you. And with the exclusives
Another very important strategic decision was to focus on well-known brands and franchises and loved ones: as if all Disney cartoons weren’t enough (but all of them, from the 1920s to today), the company bought the exploitation rights of Star Wars, Marvel (with minor exceptions), Pixar, National Geographic and much, much more. Not only if you want to see the prequel of Predator (which is really well done) you have to subscribe to Disney Plus, but even if you want to see all the other films in the saga of Predatoryou must subscribe to Disney Plus.
More attention to adults
Born as an entertainment platform for the little ones, Disney Plus has been good at not focusing only on this: since February 2021, the arrival of the Star section it has made it possible both to offer more suitable contents for a more mature audience (and therefore to broaden the catchment area) and not to lose the image of a safe environment for children.
A demanding (and convincing) audience base
However, kids remain the hard core of the public, and also an important weapon for the company, more or less consciously: after the first year of cartoons and animated films always available for just € 59.99, how many parents will have felt like canceling the subscription? Not many, both in order not to face tantrums and long faces and because at Disney they were good at giving them something to watch too (like films and series on Star, in fact).
The difficulties of Netflix
The last reason for the success of Disney Plus is related to problems Netflix, which are physiological: like any other commercial service, the platform created by Reed Hastings has probably reached its ceiling, so it has less room for growth than the others. Moreover, even if has long enjoyed first-mover advantage, that is, the advantage of those who make the first move and enter an unexplored market, now Netflix has difficulties that its rivals (for now) do not have. Like the aforementioned pricing issue: it’s by far the most expensive app of all, and users have noticed and gone elsewhere.
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What will happen now (especially to prices)
We wrote that Netflix has “difficulties that rivals do not have for now” but it must be said that they will soon have them, because to get to the Olympus of 220 million subscribers, you have to spend. And spend a lot, both to buy exclusive rights and to produce original content. Disney Plus not only he continues to lose money, but this year he has lost more than in previous years: the company explained that between a quarterly and the other “the losses have grown from 0.8 to 1.1 billion dollars”.
Despite this, the company continues to “trust that Disney Plus will begin generating profits in fiscal year 2024”, A period in which it should have (according to estimates) between 215 and 245 million subscribers. And how will Disney Plus generate profits? By doing what Netflix did, of course: by increasing the cost of subscriptions (in the US we are talking about increases of about $ 3 a month) and also by opening up to advertising, which is a way to keep prices low and still generate profitability.