No results found

Disney goes OTT: The launch that defined a major industry shift

Disney goes OTT: The launch that defined a major industry shift

The pace of streaming services launching has accelerated and will likely continue as consumers more readily adopt over-the-top delivery as their method of choice for video entertainment.

Last month, Disney rolled out its long-awaited Disney+ streaming service and — on the first day — the company saw more than 10 million sign ups. “We never had demand like we saw that day,” said Kevin Mayer, head of the company’s direct to consumer (D2C) and International division, acknowledging that Disney was surprised.

Tech issues and subsequent customer service problems cast a bit of a shadow on the launch in the United States, Canada and the Netherlands. But Mayer said Disney already was working on a coding fix, one that made Disney’s launch a week later in Australia and New Zealand go off with fewer problems. The service has more launches on the horizon for 2020.

Disney+, for $6.99 a month, is central to the company’s planned long-term evolution into a major player in the streaming industry, something CEO Bob Iger has made a centerpiece of his final couple of years at Disney.

It’s no longer optional to go OTT

The shift in the marketplace is a clear one: Consumers are showing a growing demand for streaming services of all kinds.

As Disney noted during its investor day last spring, global D2C paid subscriptions are growing at a compound annual growth rate (CAGR) of 37%, and are expected to top 810 million globally in two years.

Even more crucial is the amount of content being consumed, a number growing at a CAGR of 50%. Estimates from researchers eMarketer and IHS put the total hours of paid D2C video at 1.2 billion hours a day by 2020, up from 260 million hours last year and just 20 million in 2010. Disney plans to debut at least two dozen new TV shows and an additional 10 movies in the next 12 months.

“It feels absolutely vital for us to do this,” Iger recently said. “This is, no question about it, the future of media.”

Analysts see Disney easily topping 90 million subscribers by 2024, and that ESPN+ and Hulu — which are part of a $12.99 streaming bundle available from the company — could easily push the number of streaming customers to more than 160 million worldwide.

But, the reality is that the Internet was never designed to distribute video, least of all live video like sports, breaking news and live events.

As Thomas Carpenter, director of operations management for Disney Streaming, recently told Bloomberg Business Week, streaming on the Internet is “...like inhabiting Mars. It’s a hostile environment. It’s constantly trying to kill these streams.”

The bottom line

The news around Disney+ highlights that even the most successful OTT launches come with their ups and downs. No matter your organization’s size or background, capitalizing on today’s exciting streaming opportunities often involves navigating through a host of technical challenges. As the marketplace becomes increasingly crowded and complex, it’s more important than ever that you have a streaming partner you can trust to launch and grow your OTT service successfully. 

For insights on how to maximize your OTT potential, check out our OTT content hub.

Stay tuned.

Are you ready to maximize your OTT potential?