2023-10-16 10:57:00
During his farewell to the kingdom of Mickey Mouse, in February 2020 and following fifteen years of success, Bob Iger, the emblematic boss of Disney, saw the entertainment empire stronger than ever for its hundredth anniversary three and a half years later . He left with the feeling of a duty accomplished: euphoric stock price, stratospheric launch of the Disney+ streaming platform, constantly renewed successes in the cinema thanks to franchises acclaimed by the general public, growing attendance at amusement parks… His successor , Bob Chapek, just had to ride the wave.
But nothing went as planned. So much so that this October 16, the anniversary, is not really a time for celebration. The company, which brought Bob Iger back in disaster at the end of 2022 to turn things around, is entering its second hundred years in a state of fragility and feverishness that it had not experienced for a long time. Fortunately, theme parks are still holding up and they even generated 13% growth in revenue in 2023. But the rest of the Disney empire is faltering, whether it is video streaming with Disney+, cinema , or even traditional television. All in a context of crisis for Hollywood as a whole, with a historic strike by screenwriters – the conflict has finally found a happy ending – and actors who are continuing the strike. The production of films and series has been stopped since May 2023 and the drastic consequences of this shutdown will really be felt from the start of next year, which will weaken all the majors like Disney. While waiting for this difficult time, Bob Iger’s group has a few months to try to reverse the infernal spiral of 2023 and redefine a strategy.
Annus horribilis for Disney+: how the streaming giant is trying to get back on track
Cinema: crisis of creativity and tired franchises
Can we surf endlessly on popular franchises? It would seem not. Thanks to the acquisitions of the Pixar, Lucasfilms, Marvel and 21st Century Fox studios, Bob Iger got his hands on know-how and franchises in the 2010s that were synonymous with raining dollars on the group. Logically, Disney has not deprived itself of exploiting them to the dregs, notably the famous Marvel Cinematic Universe (MCU), with 32 films produced since 2007 and 12 to come. But with “only” $463 million at the box office, Marvel’s latest, “ Ant-Man and the Wasp: Quantumania ”, was considered a failure: it did on average half as well as the three MCU films released in 2022 and the third film in the “Guardian of the Galaxy” saga, released last May, itself less popular than the second part released in 2017.
Poor performance or fundamental problem? The industry is worried and even speaks of “ crisis of creativity » for the entire group. And for good reason: not only do most of Disney’s franchises seem to be in decline, but its many studios seem incapable of creating a new phenomenon outside of existing recipes. Pixar’s latest, Elemental “, the film ” Haunted Mansion » inspired by an attraction of the same name in the Disney parks, or the latest film in the franchise « Indiana Jones », all released in 2023, have all disappointed at the box office and in critics, despite their enormous production budget.
So we’ll have to wake up. Either by finding a way to resurrect the magic of existing franchises, or, even better, by finding new, unique recipes for success, like rival Warner Bros. Discovery, which scored the success of the year with Barbie. As content is the foundation of the entire Disney empire, from theme parks to the Disney+ streaming service, the company’s ability to remain relevant and innovative is the main key to its exceptional longevity, past and future.
After Netflix and Disney+, Prime Video (Amazon) launches an ad-supported version of its offering and raises its prices
Disney+: a position to urgently consolidate
One of Disney’s other big challenges in the months and years to come will undoubtedly be finding its place in the congested subscription video on demand (SVoD) market. However, everything started so well for Disney+: launch with fanfare at the end of 2019 (50 million subscribers in five months), then meteoric growth in 2020 (73 million at the end of December), 2021 (118 million at the end of December) and 2022 (164 million at the end of the year), partly thanks to Covid-19 which accelerated the adoption of SVoD for the general public. Euphoric, Disney even hoped in 2021 to climb to 230 or even 260 million subscribers in 2025… before becoming disillusioned.
Because since the start of 2023, Disney+ has stalled in growth. Partly due to the loss of the rights to the cricket championship in India, its second largest market in the world following the United States, the service suffered a series of disappointments and went from 164 to 147 million subscribers in nine months. The intensification of competition – notably the arrival of Max (Warner Bros Discovery) and Peacock (Universal) in the United States – has played a role. But Disney+ finds itself above all the victim of inflation and the energy crisis, which lead households to sacrifice part of their budget allocated to entertainment. However, when it comes to saving money, users prefer to keep Netflix, Hulu, Max and even Prime Video than Disney+. The fault lies in a catalog that is too limited and too dependent on the MCU.
Back in charge, Bob Iger seems to have given up on the dream of dethroning the world number one Netflix, which is still progressing in 2023 with 238 million subscribers. Instead, it aims for profitability at all costs: general increase in prices in the last quarter of 2023, development of offers with , cancellations and deletions of films and series from the catalog to reduce its operating costs. Aware that Disney+ alone is not enough, the group seems determined to acquire the Hulu platform, of which it already holds 66%, by buying the remaining 33% from rival Comcast. The two giants must reach an agreement by the end of their current deal, which runs until 2024. Very popular in the United States with 44 million subscribers, Hulu offers many new releases and above all has the best platform in the SVoD market, which makes it the only major profitable streaming service alongside Netflix. A merger between Hulu and Disney+ would finally allow the latter to obtain the necessary critical mass and appeal that it lacks.
Netflix, Disney+, Canal+, Paramount+, Amazon, Pass Warner… comparison of streaming offers in France
What to do with traditional television, a business in distress?
Finally, Disney’s third major strategic challenge concerns its traditional television assets, including ABC, ESPN and National Geographic, among others. This historic business has been losing momentum for 20 years and the start of the digital revolution, but the decline has accelerated since Covid-19. archyde news revenue is plummeting as audiences age and viewers flee to platforms like TikTok, YouTube and streaming services.
Once a pillar of the group, does traditional television still have a future at Disney? Not so sure: Bob Iger has lifted the taboo on the upcoming sale of certain assets in this area. ABC, which formerly hosted cult and very unifying series like Dr House, Desperate Housewives or Lost, is now only a shadow of itself in terms of audiences and popular success, and seems particularly in the hot seat. ESPN would be less threatened and Bob Iger is keen, according to his statements to analysts in August, to keep shares in the famous sports channel. The fact remains that these assets are not attractive, therefore difficult to sell, and that Disney will certainly have to sell them off if it wishes to part with them to refocus on its theme parks, cinema and streaming.
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