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> "Disney has estimated it will need to attract at least 60 million subscribers, putting it on a par with Netflix, in order for Disney+ to break even." How's t

> "Disney has estimated it will need to attract at least 60 million subscribers, putting it on a par with Netflix, in order for Disney+ to break even." How's that for a barrier to entry? I don't doubt that they will be able to hit it, but it's still a mind-bogglingly high number. I think that's part of why I'd like to see Netflix's continued success - competition is a good thing, and if they were to ever go under I doubt we'd see a replacement.

futhey 7y ago
Likely a calculation of break-even with lost licensing revenue. The Disney+ adventure is a risk because you're foregoing easy licensing money for hard product money, and gambling that it'll be worth it.
- onlyrealcuzzo 7y ago
  I think the traditional media companies will be happy enough if all of the streaming companies fail due to fragmentation and they can ramrod cable back down everyone's throats. Even a streaming failure might be a win for traditional media companies. It might even be the biggest win, honestly. I don't know, but it seems like there was more money in traditional media than in streaming. The brief point in time where everyone was paying for both was probably ideal. But now that a sizable portion of the population have cut out $100+ cable bills (plus cable ads) in favor of 1-3 $10 streaming subscriptions (without ads) makes it seem like traditional media was way more profitable.
  - briffle 7y ago
    Honestly, I want it to be more like Music. I can choose whichever streaming music company I want and get 99.9% of the same music, because they have standard fees they pay each other, etc. Streaming Video is incredibly fragmented. It's honestly frustrating. I don't want to subscribe to 5 services. I currently have Hulu+Live, and it has ESPN, and lots of other channels I like, but doesn't have the local Fox station, or the local ABC station (only the national fox news and abc news). Excessive Fragmentation is going to cause everyone to go back to pirating stuff, like they did before Netflix made it too cheap and easy to bother.
    - deleted 7y ago
      [deleted]
    - papln 7y ago
      That may be because it's far more expensive to make one consumer-hour of TV/movie content than 1 consumer-hour of music content.
      - takeda 7y ago
        Having your show streamed on Netflix, Amazon, Hulu, Disney+ and others at the same time would make you more money than having it streamed only on your single service. They are all playing to kill Netflix and other competition so they can establish monopoly like they had on cable.
    - nsporillo 7y ago
      I bought an HD antenna that gave me roughly 20 local channels with crystal clear picture and no buffering for $28 - no subscription. I'd highly recommend it for cord cutters to augment their streaming with local news and sports on national tv (world series, super bowl, sunday night football, etc).
      - odysseus 7y ago
        If you live in a metro area with good signal, you can actually use a metal paperclip as a functional antenna. I picked up over 20 channels this way, no extra antenna needed.
- cookiecaper 7y ago
  Above all, Disney+ is an attempt to reclaim the massive royalties Disney was reaping from every cable subscription that carried ESPN. Almost a quarter of The Walt Disney Company's revenue originated from ESPN in 2015-ish (which was the last time I looked), making it neck-and-neck with Parks and Resorts for Disney's most valuable business unit. Cord-cutting was a serious risk to them then and I'm sure they've only felt the sting more over the last five years.
  - stefan_ 7y ago
    Ding ding ding, I think this is the only way how this kind of calculation makes any sense at all: they are expecting Disney+ to replace all the cable revenue they lost, and until then, it's not "break even". Because it sure as hell is not the opportunity costs of having their content on their own streaming service. Like Toy Story 4 released months ago, did a billion in cinema, but they still won't have it on Disney+ until.. somewhere in 2020. Their version of "betting the company" is "all the stuff you used to have on Netflix, but now you are paying extra".
  - papln 7y ago
    If ESPN is what people want to pay for, why can't they just jack up the price of ESPN instead of making Disney+?
    - matwood 7y ago
      ESPN is not what people want to pay for. Nearly every cable subscription included ESPN, and core cutting has greatly cut ESPN revenue.
    - cookiecaper 7y ago
      Disney was (and presumably still is) collecting tens of dollars per month for every cable subscription that has access to ESPN (the number I remember reading was something like $23 but that may be incorrect). Since ESPN is included in most cable subscriptions, virtually every cable subscription cancelled is an immediate revenue loss for TWDC.
JMTQp8lwXL 7y ago
Netflix has ~160 million subscribers. So, they're saying they need to be a third of the size of Netflix to break even. Since "break even" isn't all that interesting to investors, for it to be profitably worthwhile, I'd imagine they need to essentially become as big as Netflix. It seems unclear how feasible that may be. The only thing keeping me wanting to use Netflix is quality content, which has been in decline recently. Given all of the recognizable brands under the Disney name, maybe people will switch. At a technical level, I question their ability to pull off offering a service as large as Netflix with high availability. Netflix offers very competitive compensation to their engineering talent.
- crooked-v 7y ago
  A key thing drawing me from Netflix to Disney+ is that the latter is willing to actually just give me lists A-Z of all available shows and movies. I'm sure there have to be others who feel the same way.
  - fluidcruft 7y ago
    Yeah, what is it with Netflix and making it impossible to find something to watch anymore? It's like you open it up and not only do all the lists change and it's not easy to find things, but they also run around changing the cover images of the series you've been watching so you don't even recognize it at first and you're hunting around to find it again.
    - lotsofpulp 7y ago
      They are clearly engaging in user hostile behavior hoping that the number of users who cancel due to being inconvenienced is less than the number who are retained/gained by being fooled into thinking there is more than there is.
      - cududa 7y ago
        I mean I think it’s more over engineering idiocy. I was staying with my cousin for a week and Was amazed at the content Netflix recommends/ surfaces him versus me. So much cool stuff that he had, versus the relative genre stuff I get in my own account
berdon 7y ago
I wonder how that plays with their canabilizing of Hulu subscribers. Does it count those subscribers in the 60 million?
- cookiecaper 7y ago
  Hulu is primarily owned by Comcast (afaik Disney only has a minority stake). After Disney's acquisition of 21st Century Fox last year, Comcast and Disney own the vast majority of what people consider AAA entertainment content. Assuming Disney+ finds its footing, the stage is set for a Hulu/Disney+ duopoly. Comcast and Disney will starve Netflix, Amazon, et al for popular content, while simultaneously bleeding them on exorbitant license fees for the minimal selection they'll be willing to offer. Instead of switching between Netflix and Amazon Video, most consumers will switch between Hulu for Comcast-owned content (Universal, NBC, others) and Disney+ for Disney-owned content (Disney, ABC, Fox, Pixar, and many more). Netflix subscriptions will lapse accordingly. Meet the new boss -- same as the old boss. About the only way this is better for the consumer than the old-school cable setup is that municipalities won't be signing exclusive contracts with cable cos barring any competition for decades-long periods of time.
  - epaulson 7y ago
    Disney owns most of Hulu and has control. Comcast has agreed to eventually sell its remaining stake back to Disney.
    - WorldMaker 7y ago
      Disney+ also has a bundle offer for Hulu, and ESPN+ as a trio. Disney just recently reassured shareholders that Hulu was their focus for all of Disney's less "family friendly/family focused" content (Miramax, much of the Fox catalogs), including that the FX/FXX content programming team is moving into building Hulu Originals in addition to cable content. Disney seems keen on differentiating Hulu enough from Disney+ that they may not cannibalize the Hulu audience that much. (Probably the thing for Hulu to worry about much more than Disney+ is the expiration of their deal for Comcast/NBC Universal content in 2025, and the ghostly specter of whatever weird plans Comcast has for "Peacock".)
hamburglar 7y ago
I haven't figured out how they will dig themselves out of the hole of not being ubiquitous like Netflix. I'm a prime candidate for buying their service (small children who are definitely going to be missing some of the Disney content they've previously gotten on Netflix) but as far as I can tell, I have no options to subscribe on my two smart TV devices (Roku and Samsung). I'm sure as heck not buying another device just for them. I actually went looking for an app on the Samsung app store and found several Disney-branded things that just added to my confusion. One seemed to be streaming TV but 1) it didn't seem to have any recent content, and 2) when I tried it, it wanted me to sign in with my "local TV provider", which just makes me shake my head. My initial experience as a willing consumer doesn't give me much hope they're gonna pull this off...
- shantly 7y ago
  Not being on Roku's kinda weird, as it's hugely popular, widely deployed, and sees high usage. It's an odd platform but if your product is a video streaming catalogue + service well, that's exactly what it's built to do and getting that going's not all that hard. But maybe they're looking for access to whatever special SDK the big boys (Netflix, Google) get so they can make their branding folks happy (more consistency with experience on other platforms). I'd imagine developing with that's more involved. Samsung, some kind of custom Android probably? TV operating systems are a pain in the ass to test, fairly expensive to develop for, and relatively bad at drawing actual usage no matter how widely they're deployed. Might be the delay there. Big enough service needs to pay attention to that junk eventually, but I could see them dropping that for launch.
  - williamjackson 7y ago
    Disney+ is on Roku, they just didn't make the channel available before today.
- tssva 7y ago
  Disney+ is available on Roku.
- SketchySeaBeast 7y ago
fullshark 7y ago
I'd be curious how projections were calculated and what the timeline is to get to 60 mill for this calculation. Seems like adhering to business as usual is a slow but profitable death for their home video / TV department.

futhey 7y ago

Likely a calculation of break-even with lost licensing revenue. The Disney+ adventure is a risk because you're foregoing easy licensing money for hard product money, and gambling that it'll be worth it.

onlyrealcuzzo 7y ago
I think the traditional media companies will be happy enough if all of the streaming companies fail due to fragmentation and they can ramrod cable back down everyone's throats. Even a streaming failure might be a win for traditional media companies. It might even be the biggest win, honestly. I don't know, but it seems like there was more money in traditional media than in streaming. The brief point in time where everyone was paying for both was probably ideal. But now that a sizable portion of the population have cut out $100+ cable bills (plus cable ads) in favor of 1-3 $10 streaming subscriptions (without ads) makes it seem like traditional media was way more profitable.
- briffle 7y ago
  Honestly, I want it to be more like Music. I can choose whichever streaming music company I want and get 99.9% of the same music, because they have standard fees they pay each other, etc. Streaming Video is incredibly fragmented. It's honestly frustrating. I don't want to subscribe to 5 services. I currently have Hulu+Live, and it has ESPN, and lots of other channels I like, but doesn't have the local Fox station, or the local ABC station (only the national fox news and abc news). Excessive Fragmentation is going to cause everyone to go back to pirating stuff, like they did before Netflix made it too cheap and easy to bother.
  - deleted 7y ago
    [deleted]
  - papln 7y ago
    That may be because it's far more expensive to make one consumer-hour of TV/movie content than 1 consumer-hour of music content.
    - takeda 7y ago
      Having your show streamed on Netflix, Amazon, Hulu, Disney+ and others at the same time would make you more money than having it streamed only on your single service. They are all playing to kill Netflix and other competition so they can establish monopoly like they had on cable.
  - nsporillo 7y ago
    I bought an HD antenna that gave me roughly 20 local channels with crystal clear picture and no buffering for $28 - no subscription. I'd highly recommend it for cord cutters to augment their streaming with local news and sports on national tv (world series, super bowl, sunday night football, etc).
    - odysseus 7y ago
      If you live in a metro area with good signal, you can actually use a metal paperclip as a functional antenna. I picked up over 20 channels this way, no extra antenna needed.
cookiecaper 7y ago
Above all, Disney+ is an attempt to reclaim the massive royalties Disney was reaping from every cable subscription that carried ESPN. Almost a quarter of The Walt Disney Company's revenue originated from ESPN in 2015-ish (which was the last time I looked), making it neck-and-neck with Parks and Resorts for Disney's most valuable business unit. Cord-cutting was a serious risk to them then and I'm sure they've only felt the sting more over the last five years.
- stefan_ 7y ago
  Ding ding ding, I think this is the only way how this kind of calculation makes any sense at all: they are expecting Disney+ to replace all the cable revenue they lost, and until then, it's not "break even". Because it sure as hell is not the opportunity costs of having their content on their own streaming service. Like Toy Story 4 released months ago, did a billion in cinema, but they still won't have it on Disney+ until.. somewhere in 2020. Their version of "betting the company" is "all the stuff you used to have on Netflix, but now you are paying extra".
- papln 7y ago
  If ESPN is what people want to pay for, why can't they just jack up the price of ESPN instead of making Disney+?
  - matwood 7y ago
    ESPN is not what people want to pay for. Nearly every cable subscription included ESPN, and core cutting has greatly cut ESPN revenue.
  - cookiecaper 7y ago
    Disney was (and presumably still is) collecting tens of dollars per month for every cable subscription that has access to ESPN (the number I remember reading was something like $23 but that may be incorrect). Since ESPN is included in most cable subscriptions, virtually every cable subscription cancelled is an immediate revenue loss for TWDC.

JMTQp8lwXL 7y ago

Netflix has ~160 million subscribers. So, they're saying they need to be a third of the size of Netflix to break even. Since "break even" isn't all that interesting to investors, for it to be profitably worthwhile, I'd imagine they need to essentially become as big as Netflix. It seems unclear how feasible that may be. The only thing keeping me wanting to use Netflix is quality content, which has been in decline recently. Given all of the recognizable brands under the Disney name, maybe people will switch. At a technical level, I question their ability to pull off offering a service as large as Netflix with high availability. Netflix offers very competitive compensation to their engineering talent.

crooked-v 7y ago
A key thing drawing me from Netflix to Disney+ is that the latter is willing to actually just give me lists A-Z of all available shows and movies. I'm sure there have to be others who feel the same way.
- fluidcruft 7y ago
  Yeah, what is it with Netflix and making it impossible to find something to watch anymore? It's like you open it up and not only do all the lists change and it's not easy to find things, but they also run around changing the cover images of the series you've been watching so you don't even recognize it at first and you're hunting around to find it again.
  - lotsofpulp 7y ago
    They are clearly engaging in user hostile behavior hoping that the number of users who cancel due to being inconvenienced is less than the number who are retained/gained by being fooled into thinking there is more than there is.
    - cududa 7y ago
      I mean I think it’s more over engineering idiocy. I was staying with my cousin for a week and Was amazed at the content Netflix recommends/ surfaces him versus me. So much cool stuff that he had, versus the relative genre stuff I get in my own account

berdon 7y ago

I wonder how that plays with their canabilizing of Hulu subscribers. Does it count those subscribers in the 60 million?

cookiecaper 7y ago
Hulu is primarily owned by Comcast (afaik Disney only has a minority stake). After Disney's acquisition of 21st Century Fox last year, Comcast and Disney own the vast majority of what people consider AAA entertainment content. Assuming Disney+ finds its footing, the stage is set for a Hulu/Disney+ duopoly. Comcast and Disney will starve Netflix, Amazon, et al for popular content, while simultaneously bleeding them on exorbitant license fees for the minimal selection they'll be willing to offer. Instead of switching between Netflix and Amazon Video, most consumers will switch between Hulu for Comcast-owned content (Universal, NBC, others) and Disney+ for Disney-owned content (Disney, ABC, Fox, Pixar, and many more). Netflix subscriptions will lapse accordingly. Meet the new boss -- same as the old boss. About the only way this is better for the consumer than the old-school cable setup is that municipalities won't be signing exclusive contracts with cable cos barring any competition for decades-long periods of time.
- epaulson 7y ago
  Disney owns most of Hulu and has control. Comcast has agreed to eventually sell its remaining stake back to Disney.
  - WorldMaker 7y ago
    Disney+ also has a bundle offer for Hulu, and ESPN+ as a trio. Disney just recently reassured shareholders that Hulu was their focus for all of Disney's less "family friendly/family focused" content (Miramax, much of the Fox catalogs), including that the FX/FXX content programming team is moving into building Hulu Originals in addition to cable content. Disney seems keen on differentiating Hulu enough from Disney+ that they may not cannibalize the Hulu audience that much. (Probably the thing for Hulu to worry about much more than Disney+ is the expiration of their deal for Comcast/NBC Universal content in 2025, and the ghostly specter of whatever weird plans Comcast has for "Peacock".)

hamburglar 7y ago

I haven't figured out how they will dig themselves out of the hole of not being ubiquitous like Netflix. I'm a prime candidate for buying their service (small children who are definitely going to be missing some of the Disney content they've previously gotten on Netflix) but as far as I can tell, I have no options to subscribe on my two smart TV devices (Roku and Samsung). I'm sure as heck not buying another device just for them. I actually went looking for an app on the Samsung app store and found several Disney-branded things that just added to my confusion. One seemed to be streaming TV but 1) it didn't seem to have any recent content, and 2) when I tried it, it wanted me to sign in with my "local TV provider", which just makes me shake my head. My initial experience as a willing consumer doesn't give me much hope they're gonna pull this off...

shantly 7y ago
Not being on Roku's kinda weird, as it's hugely popular, widely deployed, and sees high usage. It's an odd platform but if your product is a video streaming catalogue + service well, that's exactly what it's built to do and getting that going's not all that hard. But maybe they're looking for access to whatever special SDK the big boys (Netflix, Google) get so they can make their branding folks happy (more consistency with experience on other platforms). I'd imagine developing with that's more involved. Samsung, some kind of custom Android probably? TV operating systems are a pain in the ass to test, fairly expensive to develop for, and relatively bad at drawing actual usage no matter how widely they're deployed. Might be the delay there. Big enough service needs to pay attention to that junk eventually, but I could see them dropping that for launch.
- williamjackson 7y ago
  Disney+ is on Roku, they just didn't make the channel available before today.
tssva 7y ago
Disney+ is available on Roku.
SketchySeaBeast 7y ago

fullshark 7y ago

I'd be curious how projections were calculated and what the timeline is to get to 60 mill for this calculation. Seems like adhering to business as usual is a slow but profitable death for their home video / TV department.