In the ground floor offices of the Team Disney building in Burbank, where the Disney+ team has hunkered down for the last 18 months to prepare for the company’s official entry into Hollywood’s streaming wars, a digital clock in the lunchroom ticks down the hours, minutes and seconds to launch.
In classic Cinderella fashion, the clock has finally struck midnight and the moment of transformation is at hand.
The Disney+ service debuts Tuesday, representing the capstone of chief executive Bob Iger’s tenure at the helm of the Walt Disney Co., as he attempts to position the nearly century-old entertainment company for a new era and cement his own legacy as a digitally woke leader.
The service is widely expected to be a dominant – if not the dominant – player in the streaming wars. The launch culminates a dramatic period of change that began when Iger announced plans in August 2017 to reinvent the company—that in addition to supporting its traditional television business and releasing movies into theaters, Disney would distribute its own content directly to consumers.
“In essence, we were now hastening the disruption of our own business, and the short-term losses were going to be significant,” Iger wrote about this pivotal moment in his autobiography, The Ride of a Lifetime.
Wall Street has rewarded Iger’s strategy, driving the company’s stock up 35 percent since his announcement, during the company’s third-quarter investor call, to Monday’s closing price of $136.74. The investor optimism is rooted in projections like those from researcher MoffettNathanson, which predicts Disney+ could attract as many as 18 million subscribers by the end of fiscal 2020, even though streaming-related losses could reach $4.5 billion.
Iger met with a handful of journalists last week in Burbank, along with the rest of the Disney+ executive team, to recount the milestones in Disney’s headlong race to join the streaming revolution that Netflix ignited.
Shortly after the August 8, 2017, investor call, Disney spent $1.58 billion to gain a controlling stake in BAMtech, the Manhattan-based technology company that would power the future streaming service. That same month, Iger met with media mogul Rupert Murdoch at his Bel Air estate to begin discussions to buy the film and television assets of 21st Century Fox—a $71.3 billion transaction that is the largest in the company’s history.
Iger also instituted a sweeping reorganization in 2018 that put Kevin Mayer, the executive who had overseen some of Disney’s biggest deals—Pixar, Marvel and LucasFilm—in charge of the company’s direct-to-consumer efforts.
“I stand here today on the eve of this big launch,” said Iger, as he made an unofficial appearance at the briefing. “It is the result of what has been two years of incredibly hard work and obviously significant amount of change at our company.”
Disney has said it hopes to attract some 60 to 90 million subscribers by 2024, at which point it would break even. The company seeks to use the lure of its powerful entertainment brands—Disney, Pixar, Marvel, StarWars and National Geographic—to attract subscribers.
Still, Disney+ faces stiff competition from onetime movies-by-mail service Netflix, which has a significant head start, with some 60 million subscribers in the U.S. and a total of 158 million worldwide. One cash-rich newcomer, Apple, is investing a reported $6 billion to mount its own streaming service, Apple TV+, recruiting some of the biggest celebrities in Hollywood.
Next spring, WarnerMedia’s HBO Max launches, drawing heavily from the Warner Bros. film and television libraries, popular series such as Friends and South Park, and scores of originals from the likes of director Ridley Scott (Blade Runner, Alien) and prolific TV showrunner Greg Berlanti (Arrow, The Flash, Supergirl).
Disney+ will similarly break open the vault, launching with more than 7,500 television episodes, including 30 seasons of The Simpsons, and some 500 movie titles, everything from classic Disney animated films like Snow White and Bambi, to contemporary films like Frozen and Moana. It will boast the entire Pixar library and the full Star Wars saga, Marvel films like Iron Man, Captain America The Winter Soldier, Guardians of the Galaxy and Captain Marvel, and, thanks to the Fox acquisition, the blockbuster Avatar.
Newly released films from Disney, Marvel, Pixar and LucasFilm will find their way to the streaming service after a theatrical run and being made available for rent or purchase. Fox films like the edgy, R-rated Deadpool would likely find a streaming home on Disney’s Hulu service.
Disney will spend more than $1 billion in the first year on original content for the streaming service, with 10 original films, including the holiday comedy Noelle, starring Anna Kendrick and Bill Hader, and some 25 original series. One of the most anticipated originals, The Mandalorian, is the first live-action Star Wars TV series. It takes place after the fall of the Empire in 1983’s Return of the Jedi and follows a lone gunfighter in the outer reaches of the galaxy.
Subscribers will be able to binge-watch the library of movies and TV shows, but they’ll have to wait a week for Disney to deliver fresh installments of its originals. New episodes will arrive at midnight Pacific time on Fridays, as Disney attempts to capitalize on the “water-cooler” conversations that can fuel anticipation and attract subscribers.
Iger and Mayer drew encouragement from a September test in the Netherlands, which led to some product and technical fine-tuning—but no major crashes. The streaming service attracted a wide audience of those who watched both family fare and Marvel and Star Wars content with more grown-up themes.
“The teams who’ve engaged with it here feel really good about where we are,” said Iger. “To use the word ‘excited’ would probably be an understatement.”
