How did Disney+ grow so fast?
Disney Theme Park

Written by Bartek Bezemer

I want to help you get more out of your online marketing by giving you insider tips and combine them with market trends to help you better reach your target audience.

July 11, 2020

The marketing prowess of this media giant has proven to be successful. But how did they actually do it?

It seems that everything that Disney touches, turns into gold. But the well choreographed marketing machine of Disney has been working hard to turn Disney+ into a money making business. At time of writing Disney+ has reached 50 million subscribers. A staggering number as its inception seems so short. How did they achieve these enviable numbers?

Before we go into its recent marketing efforts, I want to start off with a little history on how Disney became the media powerhouse it has become today and before it even launched Disney+. Without its rich history, it couldn’t have set off such a rocketboost launch.

I’m not going to retell every detail of the Disney company, from its conception to its reboot rush it has today. No. I want to look at a specific point in time, the era which is called the Disney Renaissance and the troubling Disney Bronze Age, the 18 year period, from 1970 to 1988, before Disney reclaimed itself as the absolute animation master.

The Bronze Age Blues

The Disney Bronze Age is a very interesting section in the history of the company, because it was the first time the Disney company was left to outsiders, not family members. Walt Disney died in 1966 and his older brother Roy, died in 1971. They left the company to Donn Tatum, Card Walker and Ron Miller. 

In 1971 Card Walker would become the first CEO of the Walt Disney Company. He remained CEO up to 1983, where he oversaw the first international Disney Park, namely in Tokyo, realizing Epcot and worked to found the now popular Disney Channel. But like with Tim Cook’s Apple, Walker was not considered a visoniory, but a great ‘steward’ according to Jim Hill in the LA Times. Behind the scenes there was obviously more going on. Card Walker faced major hardships during his career at Disney. Not only was he not a family member of Disney, lacking the charismatic legacy of the family, but long-time employee Don Bluth, left Disney during the production of the Fox and the Hound to start his own studio in 1979 Don Bluth didn’t leave on his own. He took 17% of the animation staff with him. This led to a massive brain drain within the company. Don proved he was no easy competitor for Disney either, as his studio released iconic productions such as An American Tail, The Land Before Time and All Dogs Go to Heaven. Especially the latter two I remember vividly from my childhood days.

Part of the animated feature failures which didn’t stand out from the competition, as far as you can speak of failures in a creative sense, could be attributed to the corporate management style Walker had adopted. It was dubbed as, “What would Walt have done?” in a piece in the Orlando Rising, which attributed this style to meager installments revolving around family friendly comedy. The demand for these products was so low, that in the 70’s, the main revenue stream of the Walt Disney Company were its theme parks. 

Ron Miller succeeded Walker and with his ascension to the throne, he launched the Disney Channel in 1983, which at the time would cost less than $10 a month and it was expected to have 10 million subscribers at the end of that year. A little over twenty years later, The Disney channel became a valuable asset to the company as it was available in 80 million homes through cable back in 2002 in the United States. The Disney channel was a valuable medium for Disney to launch new franchises and products and stay on the radar with its most loyal fans. 

Reclaiming Disney Magic during the Disney Renaissance

After its troubling past and new product launches a new dawn had risen above the Disney empire. The Renaissance. The Disney Renaissance Era is perhaps one of the most well known periods in Disney’s history. The term itself may not necessarily ring a bell with the average reader, but the creations that were released during this period will. The Disney Renaissance took place during a period between 1989 and 1999, where It brought out some of its most popular and iconic franchises. The period started off with the theatrical hit The Little Mermaid and soon followed by other blockbusters such as Aladinn, The Lion King, Hercules, Mulan and Tarzan. 

These installments are so successful that it makes you forget that after this, some horrible products came out as well. But the Disney Renaissance has instilled such a strong sense of nostalgia through a generation of children, that it has created customers for life. Children who were raised with these franchises have now kids of their own and want to pass on the magic this particular era has given to them. 

But The Disney Renaissance just didn’t appear on its own out of thin air, like a Big Bang event. This era was heralded by Michael Eisner, who was appointed as CEO in 1984 and led the company for 21 years. Eisner came from Paramount Pictures and knew the media landscape like no other and had a feeling for what resonated with broad audiences, a trait that was lost at Disney years prior. Eisner, according to an editorial WDW News Today, inherited a company which performed poorly, financially and createvily. The Walt Disney Company had become a far cry compared to its former glory when under the leadership of the Disney brothers. 

Disneyland Ferris wheel
Eisner raised the prices of the theme parks which resulted in a strong increase in revenue.

While not all of Eisner’s business decisions were always stellar, he maneuvered the giant media ship into the right direction, laying the foundations for the success of the years that would follow. One of the decisions that Eisner took was to raise the prices to the theme parks, something that Ron Miller refused to do. It greatly increased the cash flowing into the company, strengthening its stock position. 

Disney began to heavily market its videocassettes with its strong franchises, consequently tapping into yet another revenue stream. Home video releases can be watched as often as wanted, creating familiarity with all the colorful characters across the different franchises. The video cassettes were also a cheap alternative to all other Disney related products, so parents could buy them, keeping their kids engaged with the brand. Eisner not only sold its products through videocassettes, but also to TV Networks who were eagerly awaiting new content. Disney was filling the media landscape, not only through its owned media. It was everywhere. 

The Walt Disney Company had become a far cry compared to its former glory when under the leadership of the Disney brothers

To breathe new life into its movie and television products, Eisner appointed Jeffrey Katzenberg. Katzenberg who started in the mail room became the president of the production and motion pictures division at Paramount at the young age of 29. But his employer, Barry Diller had full confidence in his abilities, as he was trained by Diller himself. It was under his leadership at Disney that produced those stellar productions we know and love today. Katzenberg could draw from his experience at Paramount to create products which would fly off the shelves. 

All these different aspects, from stabilizing cash flow, to creating new products and franchises that were loved by the general public, turned Disney into a massive media empire that still picks the fruits from the Renaissance era today.

When revealing a name sets of a chain reaction

With that short history lesson, we go back to the more recent past. It’s August 2016, where Disney buys a minority stake in streaming technology company BAMtech, a spin-off of MLB Advanced Media for $1 billion. The first project using the BAMtech technology would be ESPN with its ESPN+ service. After multiple investments into the company, it transformed into what is now called Disney Streaming Services, the parent company for the different streaming sub brands. But back then, when Disney bought a stake in the streaming service Variety still called it a “curveball”. Why would a content magnete buy a sports channel in the streaming business?

What was labeled as a far fetched project, would lay the foundation for the bigger plans Disney had in mind. Disney saw a decline in paid television and a growing streaming market. What it was also doing was creating a unique streaming proposition. But it would take years before we would see what Disney was cooking up. Netflix, who was specialized in series and movies, lacks a dedicated sports library, which is an integral part of media consumption. Especially in the United States. We also cannot downplay the role Netflix has had indirectly. It had standardized streaming and made it a staple of current household entertainment. Disney was able to piggyback on this new form of entertainment. 

It was on November 8 of 2018, where the name Disney+ for the streaming service was unveiled by then CEO Bob Eiger. The service was to be released in 2019, but a pinpointed release date was still unclear. It would include franchises from Disney, Pixar, it’s successful Marvel franchise, Star Wars and National Geographic. A stellar line-up for movie and nature enthusiasts who happened to be parents. Media outlets such as Variety, CNBC,the LA Times, CNN and many, many others from global to regional were quick to report on the new streaming product. This was a head-on attack on the streaming market dominated by Netflix, who at the time of the announcement had 137.1 million subscribers. Would Netflix be brought down to its knees? 

With all the coverage, the gross media value cannot be underestimated and reaches into the many millions of dollars when it has to be bought through media companies and ad platforms. Only the top of business foodchain are able to turn an announcement into an almost full blown marketing campaign. 

After the wait, light at the end of the tunnel appeared on April 11, 2019, where Disney+ was to be released in the U.S. on the 12th of November 2019. With a price of $6.99 per month they were 50% cheaper than Netflix who charged $14.99. It was a full blown attack on Netflix. Who could resist the child friendly and blockbuster line-up now? 

On the 6th of August Disney announced it would bundle Disney Plus, ESPN Plus and Hulu. A packaged deal that not only attracts fans of franchises such as Star Wars and Marvel, parents, but also sports fans would be able to get an unprecedented streaming experience.

Revving up the marketing engine

The Netherlands got the first glimpse of Disney+ with a free trial, which after two months would be automatically turned into a €7 per month subscription or €70 for 12 months. Telecompaper reported on the 4th of October 2019 that 8% of Dutch households had signed up for the streaming service. The choice to pilot the new service in the Netherlands might seem odd to many. Why would Disney pilot in such a small country in Europe? The Netherlands is a densely populated country with an advanced internet infrastructure, including an expansive digital advertising network, may it be online and offline. Therefore it’s easy to scale quickly without waiting for printed billboards to roll off the press.

Disney Plus Direct to Consumer Banner
Disney Plus Direct to Consumer Banner. Source: Disney

While the Netherlands was getting accustomed to the streaming service, the United States was next. In preparation of the release the product was accompanied by a lot of advertising. Billboards popped up across the US, featuring its most iconic series, ranging from Disney hits such as Tangled, Moana and Star Wars. Social media ads were filling screens, even now many months after the release. The launch was an unprecedented success. After just one day after its release, Disney+ reached 10 million subscribers. Disney wouldn’t tell how many of them were paid subscribers, but the bar was set. Disney+ was here to stay.

The 3rd of March 2020, Sky was able to negotiate a deal for a UK release. Jeremy Darroch, Group CEO at Sky said, “We’ve built a strong partnership with Disney over three decades and we’re pleased that our customers in the UK and Ireland can continue to enjoy their world-class content – all in one place on Sky Q.” Disney also signed a deal with a French branch of Canal Plus, one of the biggest paid television networks in France. Through Vivendi, it would have the exclusive rights to deliver Disney content to its members in France from the 31st of March 2020.

I can name all the different partnerships, but you get the gist. Disney was proving through its amazing subscription numbers that it couldn’t be ignored. Even early on in 2019 the CEO of Verizon said it even beat their high expectations. Direct to consumer providers were lining up to add Disney+ to their portfolio. The consumer wanted the Disney magic in their living room.

A worthy adversary for Netflix

Distilling the different aspects of the launch we can see that the press was caught off guard with the announcement of Disney+. Who would dare to dethrone Netflix? No startup would be able to come close to it and established media giants were holding on to television. They were proven wrong. Exactly what Disney wanted, because all media across the globe world were reporting on them. 

But we cannot underestimate the marketing machine that Disney has become, with pockets filled with cash. It learned from its different ups and downs over the years to create products that do appeal to mass audiences. Remakes lure in a new generation and open the gates to more nostalgic products and those to come. A generation brought up with Disney magic was ready to pull their credit cards to relive it all. Disney+ is a gateway to other products from Disney franchises. Before you know it you walk into the Disney store to buy the plush toy of your kids favorite character, buy a costume for Halloween and you’ll be riding the Mickey Mouse roller coaster the next year.

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