Provocative article in the Atlantic this week about Disney and the future of streaming.
Disneyflix Is Coming. And Netflix Should Be Scared.
Disney's streaming service will be a real threat to Netflix. But it will also be a real threat to Disney's TV and movie arms. Will Disney take a huge leap, and a huge risk, by opening major movies on its streaming service?
Quote:
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What if Disney bypassed the middlemen and put a highly anticipated film like Black Panther on its streaming service the same day it opened in theaters—or made the film exclusive to subscribers? In the short term, sacrificing all those onetime ticket buyers might seem financially ruinous. But the lifetime value of subscriptions—which renew automatically until actively canceled—quickly becomes profound. If the film’s debut encouraged just over 4 million people to sign up for an annual subscription to a $10-a-month Disneyflix product—about the same number of subscribers that Netflix added the quarter it debuted its original series House of Cards—Disney would earn a net revenue of nearly $500 million in just the first year. Black Panther was a massive hit as a theatrical release; it could have been even bigger had it been used to transform onetime moviegoers into multiyear Disneyflix subscribers.
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Such a move would be another nail in the coffin of the theatrical movie business. But maybe Disney is willing to make that sacrifice to make a big leap in digital subscriptions, which are the future of digital entertainment.