Disney+

1. Page 1
A Market Analysis for
Disney+
Alex Leite
Full Sail University
Project & Portfolio II: Business and Marketing
August 24, 2021

2. Page 2
EXECUTIVE SUMMARY
This report provides a comprehensive analysis and evaluation of the on-demand at-home
subscription streaming service Disney+, as well as its parent company, The Walt Disney
Company. It discusses the successes and areas of improvement of the streaming service as well
as an in-depth comparison to the major competitors of the brand. The report examines the
company’s current financial state, its target demographics, the growth of subscription rate, the
intellectual properties owned by the company, and the globalization of the brand. Also included
are recommendations on how Disney+ can increase its subscriber base by focusing on growing
its library of intellectual properties, expanding its target demographic, streamlining its platform
for travel, expanding its availability to more countries, and creating a higher-tiered version of the
subscription service.

3. Page 3
OBJECTIVE
Disney+ is looking for ways to retain its subscriber base while also trying to acquire
subscription growth. COVID-19 has forced millions of people into their homes, in search of
entertainment. This led to a massive influx in at-home entertainment streaming, thus a huge
increase in the subscription base for Disney+. With restrictions easing, Disney+ is asking for
analysis to suggest ways in which the streaming service can retain the subscriber base they
acquired during this time, while simultaneously growing the subscription rate. Disney’s main
objective is to have the highest number of subscribers compared to its competitors.
RESEARCH METHODOLOGY
The information from this report was collected using multiple online resources. It was
compiled by using the company website, social media, multiple news sources, online articles,
financial recourses, and online databases. All the data was gathered during August 2021. The
financial data was gathered on the day it was researched, on August 5, 2021. Some sources are as
recent as August 2021, and others date back to early 2019. It was challenging to find the exact
number of subscribers for Disney+ and its competitors, as this information is ever-changing and
volatile, and the services infrequently release their subscription gain statistics.
RESEARCH AND KEY FINDINGS
Disney+ (Disney Plus) is an on-demand at-home subscription streaming service that distributes
Disney’s immense library of Disney films, Disney Animation, and Disney Channel Originals. It
also includes titles from the company’s acquired intellectual properties such as Pixar, Star Wars,
Marvel, National Geographic, and much more. Disney+’s American product line includes their

4. Page 4
baseline monthly and annual subscription as well as “The Disney Bundle” which includes Hulu
and ESPN+.
The CEO of Disney+’s parent company, The Walt Disney Company is Bob Chapek. Disney
Media & Entertainment Distribution, which is the umbrella over Disney+, ESPN+ and other
Disney-owned streaming services, is chaired by Kareem Daniel. The President of Disney+ is
Michael Paull. Paull was the CEO of Bamtech Media and came over to Disney+ when Disney
acquired the company in 2017 (Paull, 2021).
Disney+’s demographic is men and women (57%), millennials and gen Z’s (64%), and
households (32%) with children under 10 who make less than $100,000 per year (77%) (Dean,
2021). The service’s geographic is Suburban (42%) and Urban (38%) (Dean, 2021) in 36
countries globally (Nickinson, 2021). Customers of this service enjoy family-friendly content
including that of action and adventure. They also seek nostalgia, as the service not only provides
classic Disney films and television shows but also has remakes and spinoffs of these family-
friendly classics.
Disney+’s parent company, The Walt Disney Company, hasn’t matched the financial growth that
its subsidiary Disney+ has seen, and this was predominantly due to the COVID-19 pandemic.
According to the Washington Post, The Walt Disney Company’s “operating income plunged
from $4 billion in 2019 to just $1.3 billion in 2020, a drop of 67 percent” (Zeitchik, 2021).
However, the company’s subsidiary, Disney+, has seen impressive growth and has improved the
performance of Disney stock.

5. Page 5
Disney+ was launched by its parent company, The Walt Disney Company, on November 12,
2019. The subscription service had over 10 million signups at launch, and as of August 12, 2021,
Disney+ reached over 116 million subscribers (Spangler, 2021) which means the company has
seen 1,060% growth in subscription gain since
launch. This growth is partially due to the
accelerated streaming trends due to the COVID-
19 pandemic. Nevertheless, Disney+’s growth
has swiftly decelerated in Q4 of 2020 and into
the first half of 2021. After COVID restrictions
eased and consumers were no longer confined to
their homes, inevitably “binge streaming”
content, Disney+ has a massive loss of
momentum in subscription growth.
In the last few years, the world has been introduced to a multitude of “streaming giants”. When it
comes to subscriber count, Disney+ has many services to compete with. Discovery+ with 15
million subscribers, Apple TV+ which has 33.6 million, Viacom CBS with 36 million,
NBCUniversal's Peacock with
42 million, and HBO Max which
has 67.5 million subscribers.
With 116 million subscribers as
of August 2021, Disney+
quickly brought itself to second
place in the streaming race but
Figure 1: "Disney+ and Netflix's Next Challenge: Shaking Off
Slower Streaming Growth” (Weprin, 2021)
Figure 2: "Here's How the Biggest Streaming Services Stack Up in Mid-2021
(Sutton, 2021)

6. Page 6
they have a long road ahead of them if they want to compete with their biggest competitor,
Netflix, which comes in with the highest subscriber count with over 208 million paying
subscribers (Sherman, 2021) which gives Netflix over double the number of subscribers
compared to Disney+.
With its domination of the film industry in the US and theme parks globally, The Walt Disney
Company is one of the most recognizable brands in the world. The parent company is valued at
over $61.3 billion. With the rights they’ve gained to popular intellectual properties through the
acquisitions of companies such as 21st
Century Fox, Marvel Studios, Pixar, National Geographic,
and Lucasfilm, alongside the extensive list of Disney created films and series, Disney+ has an
extensive library of owned properties that will draw in subscribers. Owning these properties will
allow them to continue to grow on these stories to push the subscription numbers up.
It is projected that the use of subscription video streaming services, in general, will see
exponential growth in the years to come. According to Nielsen, “64% of time spent on
Figure 3: Screenshot of the Disney+ Platform showing multiple intellectual properties owned by The Walt Disney Company

7. Page 7
televisions was on network and cable TV, while 26% of the time was spent on streaming
services” in the US. This number is quickly increasing from the 20% of time spent on streaming
in the prior year (Bursztynsky, 2021).
The streaming service is currently available in 36 countries (Nickinson, 2021) with India being
the largest individual country for Disney+ subscribers, making up about a third of its subscriber
base (Majumdar, 2021). While the service plans to expand its market to Hong Kong, South
Korea, and Taiwan, it is yet to be released in the most populous country in the world, mainland
China.
Thanks to the internet, and the magic of globalization, the outreach of the platform is getting
more easily attainable in countries around the world. According to datareportal.com, a staggering
“6 in 10 people around the world now use the internet” (Kemp, 2021) and with more and more
consumers having access to the internet, the more people have access to Disney+. This has
opened a literal world of opportunity for The Walt Disney Company, and Disney+ is the avenue
that’ll turn this “American” brand into an even bigger global enterprise.
CONCLUSIONS
With the financial backing of The Walt Disney Company and the extensive list of powerful
Intellectual properties that come with it, Disney+ came into the war of the streaming services
heavily armed. However, Disney can’t sleep on its biggest competitor, Netflix. Netflix has over
double the subscribers, and a head start of over 10 years acquiring subscribers. Disney+’s
subscription rate is growing rapidly comparatively. With consumers turning away from
traditional cable TV, and toward online streaming, this market will swiftly continue to grow, but

8. Page 8
the recent lull in new subscription acquisition is proof that Disney must continue to push out
high-quality content to keep up with its biggest competitor.
An external factor that will help Disney+ to grow even further is globalization and the rapidly
increasing availability of affordable internet worldwide. Also, during the peak of the COVID-19
pandemic, streaming services worldwide saw a massive influx in their viewership due to
quarantine orders. Disney+ must continue to appeal to the subscribers they acquired during this
period, while also trying to grow their subscriber base.
RECOMMENDATIONS
To reach the number one spot in the race to the most subscribed streaming service, Disney+
needs to not only grow its library with high-quality content at a rapid pace but also needs to
expand its global and demographic reach simultaneously.
With most major entertainment studios moving into streaming services, competition is
continuing to grow rapidly for Disney+. Also, most of these competitors are releasing exclusive
content to their IPs. This means that Disney needs to increase its exclusive content production to
keep up with the competition. Disney+ should capitalize on the extremely popular intellectual
properties that they already own by creating spin-offs, sequels, and retellings of these properties,
as well as growing their library with exciting new content that will appeal to all demographics.
Disney+’s main demographic is millennials, gen z, and households with children under 10. This
however excludes older demographics such as gen-x and baby boomers. Baby boomers account
for 21.45% of the population, and Gen-X accounts for 19.71% (Statista, 2021). Targeting this

9. Page 9
massive percentage of the population could tremendously increase the subscription rate to
Disney+. With the increasing rate at which baby boomers are using smartphones, tablets, and
streaming devices, this is a missed opportunity. Marketing and advertising the classic content to
this demographic, as well as creating new content that would appeal to baby boomers and Gen-X
would help to increase its subscription base substantially.
While Disney+ is available in 36 countries and counting, a major flaw in this is that Disney+
doesn’t allow all users to access their entire library when they leave their home country. In
certain countries, users can’t even log in to their accounts at all. While users can watch
downloaded content in offline mode, the convenience of online streaming isn’t allowed. This
isn’t the same for some competitors of the service, including Netflix. Disney+ needs to fix this
issue immediately to keep its customer base who travels regularly.
China is the most populated country on the planet, yet Disney+ is not yet available to that market
due to the internet regulations and laws in China. If Disney+ can find a way to work around these
internet regulations in China, it’ll grow its global reach substantially.
Also, regarding globalization, Disney+ can manipulate its library to appeal to different markets
in the countries the service is available in. The content in the app can be altered based on the
market it is trying to reach. Providing dubbed programming will benefit Disney+ to grow even
further outside of the US. Disney+ should also create new content that will appeal to the needs
and tastes of its consumers in different countries.

10. Page 10
With the rapid increase of affordable internet availability worldwide, an increasing number of
consumers are moving away from traditional TV viewing and toward streaming services every
year. Disney+ should modify its product line and offer a higher tier plan that would allow its
subscribers to view Disney-owned networks like Disney Channel, ABC, ESPN, Lifetime, and
Freeform live from the Disney+ app and streaming service. Not only would this higher-tiered
product increase revenue, but it would increase the appeal of the product itself, thus drawing in
an increased number of subscribers.
REFERENCES
Bursztynsky, J. (2021, June 17). About one-quarter of U.S. TV time is spent watching streaming
services, says Nielsen. CNBC. https://www.cnbc.com/2021/06/17/nielsen-streaming-
makes-up-only-26percent-of-time-spent-in-front-of-tv.html.
China population (LIVE). Worldometer. (2021). https://www.worldometers.info/world-
population/china-population/.
Kemp, S. (2021, April 26). 60% of the world's population is now online - DATAREPORTAL –
global Digital insights. DataReportal. https://datareportal.com/reports/6-in-10-people-
around-the-world-now-use-the-internet.
Majumdar, R. (2021, July 3). India comprises a third Of DISNEY+ subscriber Base Globally.
Inc42 Media. https://inc42.com/buzz/india-comprises-a-third-of-disney-subscriber-base-
globally/.

11. Page 11
Nickinson, P. (2021, June 10). Disney plus price: What it costs in all the countries in which it's
available. whattowatch.com. https://www.whattowatch.com/watching-guides/disney-plus-
price-what-it-costs-in-all-the-countries-in-which-its-available.
Paull, M. (2021). Michael Paull. Michael Paull | DMED Media.
https://dmedmedia.disney.com/leadership/michael-paull.
Sherman, A. (2021, May 13). Disney+ subscriber growth is SLOWING like NETFLIX'S - with
One worrisome difference. CNBC. https://www.cnbc.com/2021/05/13/disney-subscriber-
growth-slowing-like-netflix-with-much-lower-arpu.html.
Spangler, T. (2021, August 13). Disney plus Tops Expectations, Reaches 116 million
subscribers. Variety. https://variety.com/2021/digital/news/disney-plus-tops-expectations-
reaches-116-million-subscribers-1235040516/.
Sutton, K. (2021, August 16). Here's how the biggest streamers stack up in mid-2021. Adweek.
https://www.adweek.com/convergent-tv/how-the-biggest-streaming-services-stack-up-in-
mid-2021/.
U.S. population share by generation 2020. Statista. (2021, July 27).
https://www.statista.com/statistics/296974/us-population-share-by-generation/.
Weprin, A. (2021, August 11). Disney+ and Netflix's Next Challenge: Shaking off Slower
STREAMING GROWTH. The Hollywood Reporter.
https://www.hollywoodreporter.com/business/business-news/disney-netflix-slower-
streaming-growth-1234968548/.

12. Page 12
Zeitchik, S. (2021, February 12). Disney took in nearly $5 billion less in revenue over THE
pandemic-riddled holidays. The Washington Post.
https://www.washingtonpost.com/business/2021/02/11/disney-quarterly-results-down/.