INTRO CHANNEL

Imagine a world without Disney+... sounds impossible, right? But what if that’s the world we're heading into? Ever thought about why Simba might be looking for a new streaming home? Or why Elsa might just let it go... from Disney+?

In today’s video, we're diving deep into the reasons why Disney+ might just become the lost city of Atlantis in the vast ocean of streaming. Is it the competition? A corporate iceberg? Or simply a change in the magical winds of entertainment?

Grab your Mickey ears and let's embark on this unexpected journey together. Ready? Hit that subscribe button and let's get magical!

INTRO

Compared to cable television, streaming has seemed like an unbeatable offer for the past ten years. Early on, it appeared revolutionary because platforms like Disney Plus offered lower fees, personalized recommendations, and the freedom to pick what and when you watched. The option to avoid the red tape, expenses, and wait times associated with securing a cable installation felt like a gigantic middle finger to the rapacious cable companies that had been raising their rates and raking in profits. It appeared that customers had won. Yet how? How can one business potentially bring down a multibillion-dollar sector?

Netflix, the first big hit service, won over the competition by being innovative, particularly disruptive innovation. By taking advantage of emerging technological trends, providing greater convenience, and undercutting cable with lower pricing, this new service was able to replace the outdated business model and attract a large number of consumers. With new competitors like HBO, Paramount, and Disney soon joining in to ride the wave as well, everything seemed to be going well for Netflix. The streaming market seemed to be growing unabatedly. Behind closed doors, though, things are less glamorous.

You see, despite being far less expensive than cable, streaming is also much less profitable. While it is incredibly successful at luring new customers, undercutting cable with low membership costs has a significant drawback. Compared to TV, streaming only produces 1/6 as much revenue per home. enticing to customers? Sure. In contrast to cable companies, however, Netflix and other streaming services continue to face difficulties. So why is this business strategy so common if it isn't very profitable?

Companies like Netflix, HBO, and Disney, for example, have been using a strategic approach. The era of businesses turning things around quickly is over. For long-term gain, many technological companies will put up with years of steady losses. Growth is now more important than profitability. The winning strategy for the prosperous decade that was the 2010s was to gain lucrative revenue, market share, and customers while driving out other businesses. But the game has changed because the business is now oversaturated with competitors, and customers are dispersed. Disney's stock values, which have been falling sharply for some time, are starting to collapse due to the lack of earnings and rising costs, but they're not the only ones.

Investors are beginning to doubt this expansion strategy and are applying pressure to demonstrate a return due to the global recession and a business model that is already in difficulty. Rising sales don't pay off well if they're all losses. Additionally, executives can only go so far in persuading shareholders to throw their money into a bottomless hole. Big improvements are starting to be implemented by streaming services. Everywhere they can, they want to reduce expenses while increasing revenue, and Disney Plus is no exception.

Even though Disney is a latecomer to the digital rat race, the idea of a Disney streaming service looks like a money maker. Due to Disney's well-known IPs and their acquisition strategy, Disney Plus appears to have been a dominant force, quickly gaining millions of subscribers and a substantial market share. However, despite its size, Disney still faces formidable obstacles in the streaming industry. The corporation has been investing a lot of money into creating endless series centered around its numerous brands, including Star Wars, Marvel, Fox, Pixar, and many more, in order to keep its subscribers. They're still having difficulties, though.

With the service losing millions of users and Disney no longer benefiting from its lucrative expansion, the money drain isn't working. Because the entire industry has changed, the era of streaming loyalty is passed and these initiatives are no longer enticing enough to keep customers. Consumer behaviors have completely changed as a result of the inflow of such a broad range of rivals and fragmented services. According to research, a startling 36% of customers are classified as service hoppers who change and re-subscribe to a number of services over the course of a year depending on the availability of new television shows and movies.

Disney has been investing millions of dollars on programs to attract guests who only intend to stay for a short period of time in an effort to capture those customers. massive expenses with little payoff. Disney may have believed that this market would be a straightforward source of income, but it's obvious that the business misjudged the worth of its older film and property library because they aren't compelling enough to generate long-term profitability in such a fragmented industry. Disney Plus is not the golden hen, as investors have discovered, and something needs to happen.

They have set an ambitious goal of turning a profit by 2024, which may not even be possible, and are now beginning to squeeze out extra profits where they can. As shareholders increase the pressure, streaming services are undergoing some changes as they fight for survival and profitability. What does this imply for Disney Plus, though? Will they be able to adapt, or are they perhaps already in too deep?

Well, some of these changes are already beginning to become apparent. The two ways to boost a company's profitability are to raise sales and reduce expenses. Disney is also making significant changes in both areas. Over 40 series and movies from Disney Plus have recently been canceled by the company, which is slashing costs everywhere. Some of these projects were big, expensive, and relatively recent, like "The One and Only Ivan" with Brian Cranston.

It seems absurd to remove content from a streaming service, but doing so incurs a cost that Disney has fought with from the beginning: licensing. Because it keeps investors happy and boosts revenue, axing dozens of shows and films is worth the uproar. Disney anticipates saving a startling $3 billion in content costs by getting rid of properties that increase licensing fees but don't increase customer loyalty. The company intends to spread out new shows to cut costs and avoid duplication while shifting away from a wider catalog and beginning to focus on its core brands.

In a last-ditch effort to turn its streaming service profitable by the end of the year, Disney CEO Bob Iger also revealed that over 7,000 jobs would be eliminated soon. a challenging task and an ambitious goal. However, Disney is also changing the platform to allow for new revenue streams, so cutting costs is only half of their battle. And this might be the biggest change of all.

In an odd turn of events, streaming providers like Disney Plus are looking back at the cable business model and are selling services with advertising. The providers that made cable advertising look like a habit of the ancient past have finally understood that they are a necessary for business. Disney has just established a new membership option for this service, Disney Plus Basic, at $7.99 a month with advertising, while secretly boosting the price of their supposedly "premium" option to $10.99 a month.

The streaming service is now providing a variety of bundles, including the trio of Disney Plus, Hulu, and ESPN Plus for $12.99 a month, as they aim to milk more money out of their subscribers and keep them trapped into their ecosystem. The corporation anticipates that these price rises and new memberships would bring to a boost in revenue.

This is a pivotal era for the streaming industry as a whole. Companies like Disney are fighting for survival and profitability in an oversaturated industry. Disney's tactics and modifications will serve as a barometer for the industry as a whole, as companies are facing comparable issues. It's still uncertain if Disney Plus will be able to fulfill its ambitious aims or if it's too late for the corporation. One thing's for sure: The streaming industry environment will never be the same again.

In conclusion, it's evident that Disney Plus and the whole streaming market are at a crossroads. The business model is under threat, and corporations are scrambling to respond to the shifting circumstances. It's a business once seen as the future of entertainment but now confronts a severe existential crisis. The next three years will be key in establishing the fate of streaming as a company, and whether firms like Disney can continue to grow or suffer collapse. The age of easy money in streaming is ended, and the future is far from assured, that much is evident.