LOS ANGELES – A major expansion of the Star Wars universe. Tom Hanks as Geppetto in a live action “Pinocchio” and Yara Shahidi as Tinker Bell in a live action “Peter Pan & Wendy”. Recordings of new Marvel projects. A star-studded prequel to "The Lion King".
On Thursday, the Walt Disney Company will discuss a lot of upcoming Death Star-sized content in a four-hour investor presentation focused on streaming – all that and more, said three people with knowledge of the matter, who spoke on condition of anonymity Discussion of private planning.
Some big budget Disney films will continue to show exclusively in theaters. (The "Lion King" project directed by Barry Jenkins, which focuses on Mufasa's backstory, is a great choice.) Others will debut online. (This is where Pinocchio comes in.) All of them will ultimately serve one goal, namely to empower Disney +, the company's flagship streaming service.
At a time when streaming is becoming increasingly competitive – and some of Disney's traditional companies are struggling – Disney hopes to use the virtual event to dazzle Wall Street: here is a 97-year-old company making the leap in creates the hyperspace from direct customers to consumers.
Last month, Bob Chapek, Disney's chief executive officer, announced that Disney + had reached 74 million subscribers worldwide after just 11 months of operation. (It took Netflix seven years to reach that threshold and now has 195 million customers worldwide.) Since then, Disney + has been launched in Latin America and grown rapidly in India, analysts say. Some estimate that Disney may reveal that the service is within reach of 100 million subscribers.
Disney is also expected to release growth updates to its other streaming platforms, including ESPN +, Hulu, and a new general entertainment offering, Star, which will be rolled out overseas in the coming months.
"The question everyone has now is where to go from here?" Michael Nathanson, founder of media research firm MoffettNathanson, said in a telephone interview. "We expect much more spending on content to make Disney + an always available service that increases pricing power."
Subscriptions to Disney + are $ 7 per month. The cheapest Netflix plan is $ 9 a month, and HBO Max, a young WarnerMedia service, is $ 15.
Disney declined to comment on this article.
Investors have kissed their lips in anticipation of what Disney will reveal, including projections of subscriber growth. Disney stock is up 32 percent since Investors Day announced in August, compared to an 11 percent increase in Standard & Poor's 500-share index.
Disney was trading at around $ 155 on Wednesday, near an all-time high, although some of its theme park resorts (which are huge money generators) remain closed because of the pandemic. The company laid off 30,000 employees.
Hollywood is keen on the investor presentation as Disney executives have announced that they will be discussing an evolving approach to film distribution. The coronavirus has forced Disney and other studios to postpone the release of more than a dozen major films and redirect others to streaming services. In September Disney debuted "Mulan" on Disney + as part of a "Premium Access" experiment and billed subscribers $ 30 for perpetual access. Pixar's latest film, Soul, will be released on Disney + on Christmas Day at no additional cost.
Citing the pandemic, WarnerMedia switched 17 upcoming Warner Bros. films to a hybrid release model last week – arriving on HBO Max and in theaters simultaneously – although some of the films ("Dune", "The Matrix 4") not scheduled to come out until the fourth quarter, long after vaccines are expected to be used. The surprise move resulted in a quick and severe setback for the WarnerMedia talent, who felt betrayed by the sudden change. You also get significantly lower paydays.
John Stankey, the executive director of AT&T, which owns Warner Media, described the excitement at a conference Tuesday as "a lot of noise" and predicted that WarnerMedia's strategy would prove to be "win-win-win".
In contrast, Disney CEO Chapek and Robert A. Iger will not take a single approach to movie releases in 2021, according to people who know the company's plan.
Some titles on Disney's cinema board will be moved to Disney + at no additional cost. Expect "Peter Pan & Wendy" like "Soul" and "Pinocchio" to debut this way.
Other films will take the "Mulan" route and arrive on Disney + as premium offers. "We have something here in terms of leading access strategy," Chapek told analysts on a recent conference call. "It will play a strategic role with our portfolio of services."
Some of Disney's greatest films continue to be shown exclusively in theaters before being added to the company's streaming services. Contrary to popular speculation, for example, "Black Widow," a highly anticipated Marvel spectacle, will remain on Disney's theatrical calendar May 7, according to those familiar with the presentation.
Movies are helpful in attracting subscribers, but TV shows stream customers who pay month after month. To this end, Disney has an abundance of series for its services along the way. These include "Turner and Hooch," an adaptation of the 1989 film about a detective and his oversized mutt; "Willow", an adaptation of the large-screen fantasy from 1988; and eight Marvel shows based on characters like Loki and She-Hulk.
Streaming is not yet profitable for Disney – far from it. Direct customer losses were $ 2.8 billion in the company's 2020 fiscal year. Streaming-related losses are expected to peak in 2022 as rollout costs decrease and content costs normalize. Analysts expect Disney + to be profitable by 2024.
Disney has stated that some of the money for its new content flash will come from programming budgets for its traditional television networks. The company owns the Disney Channel, National Geographic, FX, Freeform and ABC, among others.
"We will be shifting the scale from linear networks to our direct customer business," said Chapek on the recent conference call.
Analysts pushed for additional details. "Just wait until December 10th," said Christine McCarthy, Disney's chief financial officer, on the call. "Hopefully then we can answer all of your questions."