The family-friendly Hollywood giant bets that more adult programming will help boost subscribers — at the risk of brand confusion.
When Disney launched streamer Disney+ in November 2019, it leaned on the global recognition of Luke Skywalker, Iron Man, Moana and Buzz Lightyear to great effect. The service attracted 95 million subscribers in a little more than a year. Soon, Disney will find out what happens when characters like Olivia Pope, Betty Suarez and Jack Bauer crash its streaming party.
On Feb. 23, Disney began adding programming that skews more adult to Disney+ in such markets as Europe, Canada, Australia and New Zealand under the new streaming brand Star. The entertainment giant’s plan to feature Star as a content hub within Disney+ alongside Lucasfilm, Marvel, Pixar and National Geographic is designed to help fuel sign-ups overseas, but it also stands to create confusion for the family-friendly Disney+ brand.
“Everybody knows Marvel and Star Wars and Pixar, but Star is kind of a nebulous general entertainment thing, so it’s much harder to have an obvious value proposition for people,” says Cowen media and entertainment analyst Doug Creutz. “I don’t know that having Star will incentivize somebody who wouldn’t have bought Disney+ by itself to then go buy Disney+.”
Adding to the challenge, Disney plans to increase the price of Disney+ to 8.99 in Europe and to 7.99 pounds in the U.K. (both equate to about $11) regardless of whether a subscriber intends to watch the new Star programming, which will come from Disney-owned ABC Signature, 20th Television, FX Productions and 20th Century Studios.
By offering Star programming within the Disney+ universe in many markets, Disney is turning the service into a more direct competitor to Netflix, which — with hundreds of new releases each year — promises to have something for everyone. Already, Disney is quickly catching up to Netflix, which required nearly a decade to amass a streaming subscriber base the size of the one Disney+ has today.
Disney also has taken a page from Netflix’s playbook by investing in local content. On Feb. 16, the conglomerate unveiled 10 European original series, spanning the drama, comedy and documentary genres, including a four-part French miniseries about the death of a young student in 1986 and an Italian Mafia series told from a female perspective. Disney+ plans to commission at least 50 European originals by 2024.
“Like a supercharged Netflix, they are following the same global strategy but are rolling it out at a much faster speed,” says Guy Bisson of U.K.-based Ampere Analysis. “Netflix already has all its subscriber growth — and 62 percent of its commissioned originals — coming from outside the U.S.”
Though Netflix continues to grow at a rapid clip, surpassing 200 million subscribers at the end of 2020, analyst firm Digital TV Research estimates that Disney+ will surpass the streaming pioneer in paid members in the next five years. (Disney believes it will have between 230 million and 260 million paid subs by the end of fiscal 2024.)
Disney has shied away from blending family-friendly programming with more adult fare in the U.S., where it operates Disney+ as a separate service from general-interest streamer Hulu. But Jan Koeppen, president of Disney in Europe, Middle East and Africa, says a survey of subscribers showed that they actually wanted a broader content offering within the app. “They all said, ‘We love choice.’ And the adults among them had a term that they often used: ‘We would love to have even more choice’ for what they call ‘me time,’ the time when the kids have gone to bed,” Koeppen explained during a Feb. 17 press conference.
To account for the broad range of viewers who might be accessing a household’s Disney+ account, the company has strengthened its parental controls and will allow people to filter content based on age-specific content ratings.
Bisson of Ampere sees a parallel between Disney’s global approach of combining Disney+ and Star and its U.S. strategy of bundling its various offerings — Disney+, Hulu and ESPN — into a single discounted monthly transaction. Bisson has labeled the strategy “compounding” and expects other studio-backed streamers — WarnerMedia’s HBO Max, ViacomCBS’ Paramount+ and NBCUniversal’s Peacock — to copy it as they roll out worldwide. “It’s essentially reinventing the wheel,” he says, “doing with streaming what pay TV and cable has done — bundling channels and services into a single discounted package.”
Peter Csathy, chair of advisory firm CreaTV Media, expects the launch of Star to mark only “the beginning of Disney’s expansion of its subscription streaming Disney+ service,” saying: “Ultimately, Disney+ will be the hub of much more than video. It will be the home of all things Disney and offer different tiers of service that offer diverse benefits, including early admission to theme parks, ongoing specialized Disney merchandise and more.”
Disney had considered introducing Hulu as its mass-market service worldwide but concluded that the U.S.-based platform “has no brand awareness outside the U.S.,” per CEO Bob Chapek. Star, meanwhile, takes its name from Star India, the media giant Disney acquired in its Fox deal that operates the popular Hotstar streaming brand in India and parts of Asia. (India’s Disney+ Hotstar brand comprises about 30 percent of Disney+’s global subscriber base.)
But launching Star will prove more complicated than the rollout of Disney+. Star won’t be offered in the U.S., for instance, because Hulu already serves a similar role. Meanwhile, in Latin America, the service will be offered as a stand-alone streamer called Star+ and will include live sports. “They’re trying to fit the product to the market as best they can,” says Creutz, “and it’s definitely not one-size-fits-all.”
Georg Szalai contributed to this report.
This story appeared in the Feb. 24 issue of The Hollywood Reporter magazine. Click here to subscribe.
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