Exponent #169 Family-Friendly Disney

Full podcast here.

  • Disney is an example of how a successful old-world company can figure out how to bring themselves into the new paradigm of the internet. They’ve been incredibly thoughtful in the approach. 

  • Disney was a big part of the cable bundle. That was a huge part of their company - well over 50% of their profits 10 or 15 years ago. 

  • If distribution is now one of many important points - and not the key point - your strategy needs to fundamentally change. Go back to first principles and think about it

  • The environment Disney is navigating: Disney is in 95 million houses through the cable bundle @ $15 or $20 a month. At the same time, they see how the nature of distribution will change over the next 10 years. How do you straddle the existing world and the future? How do you build toward the future while not burning down what you’ve got?

  • I could see ESPN being spun out at some point. The value of ESPN to Disney was that it made the bundle of Disney content that it benefited the whole company. Now ESPN is it’s own entity with its own strategy - if you are not going to bundle everything together I’m not sure it makes sense as a part of Disney in the long run. 

  • Bob Iger [CEO of Disney] said, “If you think about it we make movies and the theaters own the customer relationship. We create cable channels and the cable operators own the relationship. The only place we actually know our customers is when they come to our theme parks.” 

  • Disney Plus plans on having 60 to 90 million subscribers. This allows Disney to have a direct relationship with 60 to 90 million of its customers. 

  • Disney is not thinking about the service as a stand-alone product. Think about the name: Disney Plus. They are thinking about Disney Plus not in the context of a streaming service but in the context of how it plugs into Disney as a whole. 

  • Highly differentiated content still matters. Differentiation is the way around aggregators. It’s the way to develop direct connections to customers.