Disney Admits Netflix Is Beating Them

Launched in 2019, Disney+ aimed for robust video experiences at scale, but lacked the necessary technology to streamline customer acquisition and retention, and to increase engagement.

However, Iger confirmed that Disney is now developing this crucial technology. Iger went on to acknowledge Netflix as “the gold standard” of streaming service in terms of technology and that Disney needs to catch up in that area. Netflix’s superior technology drives its high margins, and Iger considers reducing Disney’s churn rates paramount to its strategy.

Despite the initial technical drawbacks, Iger confirmed that Disney is on track to achieve profitability by September 2024. He emphasized that the goal isn’t merely profitability but to make streaming a major growth engine for the company.

One area where Disney+ is not lacking is its amount of content. Home to the Marvel Cinematic Universe, Star Wars, Hulu, The Simpsons, and, of course, Disney’s massive back catalog of movies and TV shows, there is a plethora of content for viewers of all ages.

After its launch, Disney+ quickly became a hit, amassing over 10 million subscribers within its first day of operation. The service initially delighted subscribers with content from its popular franchises. The Mandalorian, a Star Wars series, particularly stood out as a breakout success, introducing the adorable character Baby Yoda that became an instant cultural phenomenon. However, the oversaturation of the Star Wars and Marvel franchises eventually led to complaints of quality control and a loss of interest.

Pricing also became an issue after Disney announced a price increase to reflect the growing content library in early 2021.  To appease some of the furor over rising prices, Disney+ introduced a lower-cost, ad-supported subscription plan in late 2022.

Even if the streaming service has some struggles, Disney is doing well overall. The company has consistently topped the box office (with the notable exception of 2023, which was plagued by bombs including Indiana Jones and the Dial of Destiny, The Marvels, Wish, and Ant-Man and the Wasp: Quantumania). The MCU alone has released 33 films, which brought in nearly $30 billion in box office receipts. Speaking on Disney’s upcoming releases, Iger highlighted Kingdom of the Planet of the Apes, the sequel to Pixar’s Inside Out, Deadpool and Wolverine, Moana 2, and the Lion King prequel Mufasa.

Disney also confirmed a future collaboration with Epic Games to launch a “Disney universe” allowing users to interact with Marvel, Pixar, Star Wars and Disney intellectual property. The collaboration indicates Disney’s commitment to embrace the future of entertainment and meets the high demand of Gen Z for gaming experiences.

Despite the challenges, the future of Disney+ seems promising as the company continues to innovate and invest in technology to close the gap with Netflix and other key players in the streaming industry.