It may be a late entrant into the VOD market, but Disney seems to be winning the streaming wars. The company’s streaming crown jewel Disney+ has raked in more than 100 million subscribers in just 18 months at a rate that will allow it to overtake big rival Netflix by 2024 at the latest.
Working on the frontline at Disney is Molly Brady, SVP, Growth Marketing, at Disney Streaming Services (part of a sweeping new division called DMED), who runs a team managing new customer acquisition for Disney+, ESPN+ and the Disney bundle, which includes Hulu. As the D2C Summit entered its second week, she joined FIPP CEO James Hewes to discuss the dramatic change in focus at the House of Mouse.
“When former CEO Bob Iger planted the flag in 2017 and said Disney was going to build a streaming business, it was a radical shift for the company that changed our business models and ways of working together,” she said. “It was a pivotal moment with the company coming together to make streaming a huge focus area.
“Part of the beauty of it is that we have all these groups, teams and established businesses that we can leverage to help promote streaming. Whether it’s the Disney Channel or ESPN we have this great synergy happening. Our core mission is to deliver content to global audiences wherever they want to consume it.”
Laying the building blocks
While Disney+ has rightfully made all the headlines, a lot of the groundwork for Disney’s streaming success was laid with the 2018 launch of sports offering ESPN+ – the company’s first foray into building a direct-to-consumer subscription services business.
“It got the wheels rolling and everything we learnt on ESPN+ enabled us to hit the ground running,” explained Brady. “Hiring teams, putting contracts in place, building an in-house trading desk from a marketing perspective, setting up accounts with the Googles and Facebooks of the world – all that was done on ESPN+.
“We also expanded globally very, very quickly – over 50 countries in less than a year and a half – so without having a lot of that work built we wouldn’t have been able to that.
“There are a lot differences between the products but at the end of the day we try and make that core structure scalable so we can leverage it for the different products and make it globally scalable.”
Learning lessons along the way
With Disney not entirely sure which content would drive the most sign-ups, its strategy when launching Disney+ was “go out big and learn fast”.
“We wanted to get as many learnings as we could as quickly as we could and tweak and pivot as we needed to,” said Brady. “With performance marketing you get a lot of data so it is a constant test and learn and see what is working and what is not.
“And there were some surprises. Some things like (Star Wars series) The Mandalorian we expected to do great but we’ve also had some failures, which I think is super important because if we are not failing we are not pushing hard enough.”
Brady said it has been important for Disney to leverage the breadth of its content. “You have Disney+ originals, you have a library of content from Disney, you have big movies. So you have to try and leverage that breadth and see what will resonate with audiences, either from an acquisition perspective or something that’s going to keep them engaged once they’ve joined the service.”
The importance of partnerships
A crucial part of Disney’s streaming strategy has been strong affiliate partnerships. “I love affiliate partnerships mainly because our incentives are aligned,” said Brady. “If it’s working well we are getting new subscribers and the affiliate partner is getting a steady revenue stream, and ideally we are bringing something to the consumer that’s adding value and that they are excited about as well. So that to me is a win, win, win scenario.
“When our incentives are aligned we are working together to put programmes together that is going to enhance the experience that the affiliate is providing for their consumers.”
In terms of acquisition channels, Brady said the use video has proven very impactful. “What better way to show what you are about to launch than with a video or a trailer?
“But in my ideal world we have diversity across channels and we are not overly reliant on one partner or one channel. There are some channels that are easier to push money into and there are some that are more reactive so it’s important to find that balance as well. If we want to push up, how do we make sure we have the levers that we need to meet business objectives at any given point?”
Using new animated film release Luca as an example, Holly revealed how her team works closely with the studios and the content team to drive awareness for content.
“If you think about the typical funnel trying to drive consideration, leveraging that piece of content, my team works with them and do that mid to bottom of the funnel where we really focus on finding those folks that are interested and warmed up and get them to convert on to the product,” she said.
“And then once you are clicking on the ad or getting to the landing page we are doing tons of testing on the landing page to optimise whether we going to do a monthly, versus an annual page or a bundle product. So, again, it’s about playing with all those levers throughout the funnel to see how we can drive the most optimal, not just number of sign-ups, but the actual contribution of a sign-up as well.”
It’s not just about great content
Disney’s streaming success has been propelled by superb content tied to some of the most popular brands in the world, including Marvel, Star Wars, Pixar and National Geographic. But while great content is hugely important, Brady pointed out it has to be backed up with a superior product.
“They both go hand in hand. You don’t want to have great content and then the streaming quality is bad, functionality is not there and it’s not on the device you want to use,” she said. “The teams have done a great job marrying great content with a great product experience across the devices you want to watch on.”
The sheer breadth of Disney’s content means the company has to try and find content that pleases a wide demographic. “While there is some overlap in audiences, there are also very different audiences,” said Brady. “So there’s different content that families with young kids are going to watch versus ESPN and combat sports and then there is some overlap like Marvel and Star Wars.
“It’s about finding the right audience, with the right content at the right time. It is where experimentation, testing and learning comes into play again to indentify what the special sauce is.”
With Disney operating in more than 50 markets the company needs to have a firm grasp of which content works well when crossing borders, while also dealing with complexities in nuances around price sensitivity, channels and devices.
“We do take a global approach and then change it for local markets as the need requires,” Brady said. “We work really closely with the individual regions and markets as we plan our go-to-market strategy for new content and releases.
“There’s a core set of content that is really big globally and then there are nuances. There might be local originals that really resonate.”