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Disney+ Needs More Than Just Marvel & Star Wars To Reach The Next Level


As earnings season wraps up, The Walt Disney Company is
set to report its last quarter results before introducing
its highly-anticipated ad-supported tier for Disney+ in
December. 

Disney is responsible for two of the
10 highest-grossing worldwide films in 2022 with Marvel
blockbusters Doctor Strange in the Multiverse of
Madness
and Thor: Love and Thunder while its
domestic parks continue to generate massive revenues. Yet
all eyes will be glued to its direct-to-consumer
division. 

Disney+, the company’s flagship
streaming service, has added 22.3 million global subscribers
this year while sibling streamers Hulu (+900,000) and ESPN+
(+1.5 million) have also grown. However, growth in the
highly competitive United States and Canada (UCAN) market
has slowed, with Disney+ adding just 1.6 million new
subscribers through the first three quarters of its fiscal
year. Can the company reignite its domestic
growth?

Disney (19.8%) had the highest corporate
demand share with US audiences in the July-October quarter,
ahead of rivals such as Warner Bros. Discovery (17.9%),
Paramount Global (12.4%) and NBCUniversal (9.8%). The
company also boasts impressive demand for its movie catalog
despite having the smallest film library among HBO Max,
Amazon Prime Video, Netflix and Peacock. However, Disney+ is
in eighth place in total on-platform TV demand share, which
may speak to the streamer’s comparatively smaller library
of TV titles.

Disney+ (8.5%) ranked third in originals
demand share in the US behind Netflix (41.5%) and Amazon
Prime Video (9.3%). Despite a steady stream of blockbuster
franchise series, Disney+’s original demand share has
actually fallen from 9.2% in Q3 2021, calling into question
the effectiveness of Marvel and Star Wars series as
subscription growth drivers for the platform. 

US
Corporate Demand Share – July-October 2022

  • Corporate
    demand share assesses the long-term viability of the top
    media companies as they look to consolidate their original
    content’s availability exclusively onto their own
    platforms.
  • This chart reveals the power of Disney as
    a content creator for both its in-house platforms and as a
    licenser of content externally (for example, ABC’s
    Grey’s Anatomy still streams on
    Netflix).
  • Disney’s corporate demand share actually
    rose 0.1% from last quarter, which is likely due in part to
    the release of Ms. Marvel, She-Hulk, Hocus
    Pocus 2
    and Andor on Disney+ as well as the
    return of The Handmaid’s Tale on
    Hulu.
  • Warner Bros. Discovery’s recent restructure
    of DC Studios is designed to wring more value out of its
    comic book intellectual property. Should the company somehow
    manage to match Marvel’s cultural footprint, WBD could
    give Disney serious competition for the top spot in quarters
    to come.

United States Movie Demand & Supply
— Q3 2022

  • This
    chart helps demonstrate which streamers are getting the
    highest ROI for their overall movie efforts — from
    original productions and licensed content to library
    titles.
  • Despite producing the smallest supply share
    of the major streamers (4.3%), Disney+’s demand share for
    on-platform movies in the US ranks third at 11.5%. This
    speaks to the audience affinity for the company’s major
    branded franchise power across Marvel, Star Wars, Pixar and
    beyond. Disney’s box office dominance over the last decade
    seems to have successfully transitioned to the company’s
    DTC efforts.
  • The company also announced in early
    October that Hocus Pocus 2 became the platform’s
    most-watched Disney film ever by hours viewed in its opening
    weekend. In its Sept. 30-Oct. 2 debut frame, Hocus Pocus
    2
    was the fifth most in-demand movie title in the US
    (47.75x). From Sept. 30-Oct. 30, Hocus Pocus 2 is the
    fourth most in-demand movie title across all platforms in
    the US with 54.57x more demand than the average
    movie.
  • The mix of high performing Disney+ exclusive
    films as well as theatrical blockbusters that quickly
    migrate to the platform have kept the service top of mind
    for consumers.

US On-Platform Demand Share – Q3
2022

  • On-platform
    demand share is an indicator of which platforms are more
    likely to be a consumer’s default “streaming
    home.”
  • At 6.0%, Disney+ remained flat compared to
    the previous quarter. However, this is partially due to the
    streamer’s smaller library of total titles as compared to
    its SVOD competitors.
  • This is also offset in part by
    Hulu’s industry leading demand share, which rose 0.4% from
    last quarter to overtake Netflix for the top spot. Hulu
    continues to benefit from its next day air capability for
    linear series such as ABC’s Abbott Elementary and
    FX’s Atlanta.
  • Combined, Hulu and Disney+
    control a dominant 25.6% of US on-platform demand share well
    ahead of Netflix (18.2%) and the eventual combination of HBO
    Max and Discovery+ (17.8%).

US Streaming
Originals Demand Share – Q3 2022

  • Since
    Q3 2021, Disney+’s demand share of originals in the US has
    fallen from 9.2% to 8.5%. However, its performance in the
    most recent quarter actually represents a 0.1%
    improvement.
  • Marvel and Star Wars series have proven
    to be effective retention tools, but may no longer be as
    strong at driving growth as fans of these franchises are
    already subscribed to Disney+.
  • Hulu has now seen an
    increase in its demand share of originals in the US in two
    consecutive quarters, rising 0.4% in that span. The streamer
    released a string of critically successful originals such as
    Reboot, The Patient and the latest season of
    The Handmaid’s Tale in the most recent
    quarter.
  • Combined, Disney+ and Hulu control 15.9% of
    the US demand share for originals in the quarter, second
    only to Netflix (41.5%).

Global Originals Demand
Share — Q1 2020-Q3 2022

  • From
    Q1 2020-Present, Disney+ has seen its share of global
    originals demand increase from 4.2% to 9.3%. Hulu only
    operates in the U.S. and many of its originals are housed
    under the Disney Star brand overseas. In the same span, its
    demand share has stayed relatively stable, ticking down from
    5.9% to 5.7% and showing impressive consistency over a
    multi-year stretch.
  • Despite Disney+’s overall
    increase, it saw its worldwide originals demand share fall
    from 9.9% to 9.3% in the most recent quarter.
  • While
    She-Hulk (24th) and Ms. Marvel (30th) both
    ranked among the top 30 most in-demand TV series worldwide
    in the July-Oct. quarter, the series — along with
    Andor — still rank below their Marvel and Star Wars
    counterparts in average audience demand.
  • Average
    worldwide demand in the first 30 days post-premiere for
    She-Hulk (71.5x), Ms. Marvel (46.58x) and
    Andor (48.82x) came in lower than many previous
    Disney+ franchise series such as WandaVision
    (85.42x), Loki (78.46x), Moon Knight (88.30x),
    Obi-Wan Kenobi (75.16x) and The Book of Boba
    Fett

    (57.31x).

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