Disney Plus: Can The Mouse have its cake and eat it too?

This spring, I’m auditing a class from the University of Washington’s graduate school of communication: COMMLD 540: Mastering the Art & Science of Professional Communication. As part of the curriculum, we post weekly commentary on current events, analyzing the communication and business strategies behind each news piece. This week I analyzed the launch of Disney Plus, as covered in this article from the New York Times.

Yesterday, Disney revealed their new streaming service Disney Plus. It launched November 12th, costs $7 per month, and features content from Disney, Pixar, Star Wars, Marvel, and 20th Century Fox. 

The New York Times describes it as a lavish, three and a half hour presentation on the Disney lot. Disney’s primary audience for the event? Wall Street analysts. 

Disney Plus is Disney’s answer to Netflix. 

A comparison of five-year performance of Disney (red) and Netflix (blue).

A comparison of five-year performance of Disney (red) and Netflix (blue).

Earlier this year, Netflix surpassed Disney in market cap to become the world’s most valuable media company. Over the past five years, Netflix’s stock climbed an astonishing 610%. Disney’s grew 62%, about than 1/10th of Netflix’s return. 

Although Disney Plus won’t launch for another seven months, early reactions suggest Disney’s announcement is working. Disney stock soared and Netflix sank. Disney reclaimed the throne of most valuable media company, at least for the time being.

Disney’s fight against Netflix poses long-term strategic and brand questions. 

For instance: through licensing and producing a wide range of media, Netflix positions itself as a one stop shop for at home video content. They produce family friendly content like A Series of Unfortunate Events and Lost in Space. They produce dark, twisted, and violent shows like Stranger Things, Bojack Horseman, and Mindhunter. 

Disney on the other hand is synonymous with family entertainment. It’s hard to imagine their logo ahead of a cynical political thriller like House of Cards. 

If Disney Plus sticks to its wholesome brand, it could lose out on market share of the streaming market. Many adult viewers will keep Netflix as their default streaming service. Disney Plus could be seen as a “nice to have” streaming option — something viewers open only they’ve browsed Netflix’s catalogue.

If Disney Plus ventures into darker programming, it could tarnish Disney’s family friendly reputation — a brand Disney built over the past century to be one of the most revered icons in the world.

It will be tough for Disney to have it both ways, but I suspect they will try to thread the needle carefully.