Streaming Forum Preview: The Rise of Disney and the Future of OTT
[Editor's Note: The author will be speaking on the panel "The Future of OTT" at Streaming Forum in London on 27 February.]
The huge increase in demand for over-the-top streaming services is well documented, with the combined volume of global audio and video traffic combined expected to account for 82% of all internet traffic this year. Regardless of whether this is down to the popularity of original productions appearing on Netflix or a more general rise in the number of streaming services available, consumers clearly enjoy the idea of content being delivered via OTT. Having the ability to watch anytime anywhere is now one of the most important factors, and content providers must be aware of this to keep up with the ever-changing market.
Pressure to adapt to meet the challenge of new entrants is impacting industry stalwarts, which must embrace new strategies to hold market share. At the start of 2017, BBC Director General Tony Hall stated his ambition that by 2020 BBC iPlayer would be the top online TV destination in the UK. To further this end, in December 2017 the BBC began making recent series available online, tapping into the binge-watching culture that has made Netflix so popular. How successful this strategy will be remains to be seen, but the move will prove interesting for industry watchers regardless.
The definition of “industry stalwart” is shifting too, of course. The BBC may be the world's oldest national broadcaster, but in today's fast moving digital economy Netflix—which first began streaming content a decade ago —an now be seen almost as an incumbent and is facing stiff competition from challengers of its own.
The latest of these challengers is Disney, which ramped up its broadcasting activity significantly throughout 2017. Along with releasing several of the most successful films of 2017, ranging from Beauty and the Beast to Spiderman: Homecoming (not to mention the small matter of Star Wars), the media giant announced in August that it plans on cutting ties with Netflix. The announcement will see Disney gradually pull its content from the OTT giant onto its current platform, Disney Life.
The move was seen as a major blow for Netflix as it signalled that Disney is now in a place in which it creates and owns enough content to flesh out its own streaming service and has suitable demand to branch off on its own. By decoupling itself from Netflix, Disney will be cutting out the middle man, targeting dedicated consumers directly to make viewing their content more convenient than ever. It will be interesting to track these developments in 2018 to see if family audiences move away from Netflix to Disney Life to catch upcoming hits such as Toy Story 4 and the Frozen sequel.
To cap it all off, the entertainment industry as a whole was fundamentally reshaped by the long-awaited confirmation of Disney's intent to purchase 21st Century Fox in December. By gaining control of Fox's 30% stake in streaming service Hulu, all signs point to a full buyout in the future. In what has been described as an excellent strategic move, the acquisition will facilitate Disney's competition in the streaming sector. Naturally, the coexistence of Disney Life will need to be carefully positioned to avoid aggrieving existing customers.
The deal brings further access to on-demand shows, invaluable audience data, a wider user base and more routes for content delivery. What's more, in owning the rights to several hugely popular shows, it can also begin to control the distribution of rival streaming services. Exclusives such as Bojack Horseman and Archer may be popular, but they can't claim the same level of global recognition as The Simpsons. This deal has confirmed Disney's position as the global entertainment provider, more so than ever before.
Overall, the resurgence of Disney signals the ongoing demand for and importance of OTT streaming services in general. Disney's aggressive consolidation strategy should be taken as a warning shot for OTT and traditional providers to step up improvements in their offerings to consumers and ensure that the means of rapidly adapting to change is baked into their operations and technology.
In 2017 Disney proved its ability to disrupt the streaming industry. Its 2018 plans look no different. As it cements itself as the new owner of 21st Century Fox and continues to build Disney Life, it will be interesting to see how the streaming industry responds to these movements, and what additional value it can tap into in order to keep up.
[This is a vendor-contributed article from Piksel. Streaming Media accepts articles from vendors based solely on their value to our readers.]
Disney+'s catalog including Pixar, Marvel, and Star Wars propelled the service to a 16.8% market share in its first month, just behind Netflix and Amazon Prime Video.