Disney investors question how Walt Disney Co. will fix their struggling television service business. According to Disney Chief Executive Robert Iger, in 2019 Disney will begin offering streaming services that will sell their content directly to consumers “with no intermediaries.” This is a huge change, as Disney currently creates and licenses content, such as animated movies and TV shows, and sells it to “cable systems and movie theaters.” Disney is now trying to compete with Netflix and Amazon as consumers have turned towards TV streaming services that offer cheaper alternatives for families who don’t want to pay for expensive cable bills. The amount of profit that Disney has been able to make through their television services has been steadily dropping since 2014, shortly after Netflix started developing their own streaming content in 2013. As a result, Disney’s stock has fallen “17% in the last two years” despite their growth in film, theme parks, and merchandise. Consumers see that television is beginning to die out as they prefer to stream their favorite shows and movies online. Disney plans to begin streaming a wide variety of sporting events not currently shown on TV through an online ESPN service. Anyone with their cable subscription should be able to use this ESPN streaming service. Disney will make all movies that they have produced available for streaming online. Disney does not currently have a price for their streaming service, but are considering giving discounts to cable users.
The location of television and movies is changing from TV screens and movie theaters to computer screens as consumers prefer the lower price of streaming to paying for cable bills or movie tickets. Disney may offer special promotions, such as lower prices for cable users who also want to use Disney’s streaming service. However, this is a limited product market as consumers have already begun moving away from Disney TV towards Netflix and Amazon streaming services. Netflix creates their own content and offers a wide variety of shows and movies, including Disney created movies. Disney will have to make sure to market their product not only to children who currently watch Disney channel on TV, but also to the adults who will pay for the streaming services. Disney’s streaming service may be a positive alternative to current streaming services for families with young children whose parents will no longer have to pay for the high cost of cable for their children to watch Disney channel and movies. It could also work for Disney buffs who can’t always access their favorite movies on Netflix or Amazon. Disney’s ESPN service will appeal to a wider audience of sports fans who can’t currently access the games they want to watch on TV. It will become more clear over the next few years if Disney TV can keep up with the shift to online streaming to compete with Netflix and Amazon.
By: Megan McKee
https://www.wsj.com/articles/future-of-disneys-struggling-tv-business-rests-on-its-streaming-plans-1509793202
I feel like since Disney is making new shows on TV they are not as fun and informative as they were since we were children. This just shows that the new content being produced should maybe change.
ReplyDeleteI believe that Disney have the capability to change and become better than before. Now a days, there are many media and entertainment groups that are new, growing, and prospering their business towards what is called trendy. Besides new, the most popular ones are also doing a good job in regards of change and popularity.
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