Disney was ahead of the curve when their streaming service was unleashed (uh, I mean “released”) in November of 2019 with a whopping 7000 TV episodes and 500 films ready to be viewed immediately.
The Covid firestorm came just a few months later (first case in the USA would come in January) and it seemed like Disney had adapted in the nick of time as box office numbers dropped a jaw-droppingly 81% in 2020 from $11 billion in 2019 to just $2 billion in the USA. The highest grossing movie that year would be “Bad Boys for Life”, released in January, before anyone had even heard of “Two Weeks to Flatten the Curve“. Nothing else would come close.
Hard to find a year in which Disney/Fox didn’t dominate the box office. Image from BoxOfficeMojo
Fast forward to, I guess you could say “normalcy” in 2023 and Disney is doubling down on Disney Plus even as box office numbers rebound. The corporation lead the movie industry with gross domestic receipts for the 7th consecutive year. An eye-popping 26% of the USA box office all went to the House of Mouse in 2022, up 65% over the previous year. The people, and their money, are flowing back into the theaters.
Okay, so the box office is on par with 1999 instead of 2019, but progress is progress right?
Back in the day, Bob Iger announced Disney would spend $500 million on original content for the streaming service. They would have Marvel movies, Star Wars movies, a metric ton of Disney nostalgic films like “20,000 Leagues Under the Sea” and “Pollyanna”. You want DuckTales, Gummi Bears, TaleSpin? It’s yours with the push of a button. Want to see an exclusive show hosted by Jeff Goldblum? You got it. Also back in the day, industry experts didn’t think the streaming service would break even until 2024 IF they lured in 60 to 90 million subscribers.
That’s a lot of content…with more coming every month. Image from Disney.
Even while 94% of the subscribers stuck around even after a $3 a month increase in price, clearing the way for more hikes to come, the numbers behind the streaming behemoth are staggering. When Bob Iger returned in November of 2022, Disney Plus had 164.2 million subscribers around the globe…and it isn’t turning a profit. That could be due to one (even more alarming) figure.
- Money Netflix spent on content in 2022? $17 billion
- Money Amazon spent on content in 2022? $16.6 billion
- Money Disney spent on content in 2020? $28.6 billion
- Money Disney spent on content in 2021? $25 billion
- Money Disney spend on content in 2022? $33 billion
See a pattern that makes the stockholders queasy? Now while you could allege that this is just a growing part of the robust Disney portfolio, I argue that Disney is throwing money at their streaming service faster than Thanos can toss a moon. While they are adding content at an incredible rate, Disney is also suffering setbacks as people aren’t exactly thrilled with the “National Treasure” and the now-cancelled “Willow” series, Star Wars fans are bemoaning “The Book of Boba Fett” and the “Kenobi” series, and Marvel fans aren’t dazzled by “She-Hulk”, or “Eternals”.
The Disney Plus app is an example of a bigger issue. As Paramount, HBO, and others scrambled to release their own app, there is simply too much content for people to readily enjoy. While Marvel and Star Wars fans will gobble up whatever is thrown their way, how many people are getting Disney Plus because they couldn’t wait for “Shop Class”, “Diary of a Future President”, “The Big Fib”, or “Meet the Chimps”?
Towards the end of 2022, people were talking about superhero burnout. Too much Marvel, too fast, with the DCEU gearing up to churn out their revitalized content. That was perhaps three or four movies a year. At the same period, Disney Plus was showing a little over 1200 pieces of content. Netflix boasted over 6000 pieces of content. Paramount Plus was throwing 30,000 pieces of content at your eyeballs.
Portfolios should be all about balance. If you invested your money into Enron stock in the middle of 2000, you’d be living the high life at $90.75 a share. But then you’d be pretty upset when it fell to just $1 by Thanksgiving of 2001. While Disney appeared to be striking while the iron is hot in 2019, they now appear to be overbalanced; continually shoving money into Disney Plus while the box office is rebounding and people are anxious to return to the theme parks. Put too many eggs into one basket, and you end up crying over spilled milk because you’re flat as a pancake.
Well, you get the idea, but does Disney?
Drop a comment if you think I’m way off or spot on or if you have an idea about what Disney should do next. We want to hear FROM YOU!
