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Disney+ and the subscriptionification of media

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Disney+ and the subscriptionification of media

November 12, 2019

The hype around the launch of Disney+ might be unmatched, but the giant’s step into the new model signals not a new beginning, but a late arrival to the party. With the immortal mouse joining the likes of Netflix, Hulu, Amazon Prime, and HBO, there’s very little doubt that subscription models are going to be the future of media, if we’re not already in that future.

Here, we’re going to look at how the subscriptionification of media started and grew, what paved the way for Disney+, and what small businesses around the globe can learn from this trend.

The rise of the subscription model

The subscriptionification of the media, and the beginnings of the subscription model can mostly be traced to rise of Netflix. While many saw the writing on the wall for physical media rental giants such as Blockbuster in the mid-2000s, Netflix was founded as an online alternative from as early as 1997. However, in its early days, it focused on online DVD rental, with each rental coming at a price.

Netflix evolved from charges per rental to a flat-fee subscription model in 2000. However, their transformation from rentals to an online platform didn’t happen until 2005. Initially, they considered releasing a “Netflix box”, a piece of hardware, but the rise of another online phenomenon, YouTube, showed them that the future of the media consumption economy wasn’t about paying for proprietary hardware or unique methods of access. It was going to be an economy of attention. The more barriers between the audience and the media they wanted to watch, the harder it would be to get them to pay.

Turning away from legacy media

As of last year, more millenials watch online video than watch TV or cable. The benefits of online streaming and subscribing to digital media are clear. For one, the ability to choose not just movies, but also TV shows and documentaries, from an extensive library of media, all without having to pay extra, is a huge bonus.

The platform is much more convenient by design. You can watch from any device and any location, so long as you have the right log-in details. An important point to many is the lack of ads, as well.

Indeed, the promise of cable, initially, was that since the viewers are paying for the content they are watching, there’s no need for advertisements. Cable providers broke that promise, much to the ire of viewers everywhere. As of yet, subscription media hasn’t.

The subscriptionification begins

With the clear benefits of subscription media, some might argue that the only thing keeping traditional media alive is a dwindling viewer base who are not familiar enough with technology to make the leap. Indeed, Netflix may have started the boom, but media companies both new and old have fully embraced the model.

Tech industry rivals to Netflix, such as Amazon Prime and Hulu, inevitably rose. New markets were born with the likes of Crunchyroll, providing Japanese animated content to a sizeable niche audience.

It was only a matter of time before the TV networks and film studios began to join the market, as well. With HBO, Showtime, and Apple TV+, the market continues to swell and get more competitive. Many customers balance two or more subscriptions and many show they are willing to switch them based on which services hold their favorite content.

It’s into this increasingly competitive marketplace that Disney+ is finally throwing its hat into the ring.

What does Disney+ mean for subscription media?

With a huge range of IPs under their belt, including all Disney Studio productions, the vast majority of Marvel properties, and now Star Wars, Disney has become a media giant of near monopolistic size as of late. As such, their streaming platform offers such a range and diversity of content that it might be the most hotly anticipated launch in the industry as of yet.

To many, the launch of Disney+ marks the turning point. Coinciding with the year that streaming starts to overtake traditional TV in terms of millennial viewership, it’s a moment of great change not just for subscription media but the subscription model in general.

The market is clear: the subscription model works. If you have a product or service that people are glad to access, then they’re glad to pay a flat-fee for it, as well. Furthermore, as competition increases, it’s about to get more profitable, as well.

What should businesses learn from Disney+?

If you’ve been considering having your business make the jump into the subscription economy, then the launch of Disney+ should be the last sign that it is, in fact, the perfect time to do just that. The subscription model has taken over practically all of new modern media ventures, but it extends well beyond, as well. The “SaaS” model that was primarily only for use in business is now used widely for software and apps beyond the B2B market. From music streaming apps to fitness apps, people are growing more and more willing to shell out recurring payments for the right online products.

The recurring revenue of a subscription model allows your business to reliably predict revenue and allocate resources based on those projections. Subscription services are also able to scale much more effecitvely, because they can introduce new service levels to meet the needs of their clients. We’ve already seen Disney+ dipping into this model. They’re partnering up with other networks, particularly EPSN+ and Hulu, to offer premium bundles to customers who want more and are willing to pay more.

Is it time to join the subscriptionification?

If you have a product or service that your clients are willing to make recurring payments to, then now is the time. With subscription billing software making it easier to switch over the new model and allowing much more efficient management, you can focus on delivering the services that keep the subscriptions coming.

Disney+ is far from the first, but the sheer anticipation built around its launch shows that this is a transformative opportunity for not just all media, but all business.



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