Comments
dmendyk
3/8/2017 9:33:17 AM
User Rank Platinum
Re: Skinny TV Salvation
Disney's dilemma here is that it has been ringing up significant revenue from subscribers who DON'T watch its programming. On demand, skinny bundles, etc. are damaging that phantom revenue stream. So far, Disney and other content providers (like Discovery) have been able to cajole pay TV providers into maintaining their fat-filled offers, but over the past two years more operators are moving toward slimmer offers. Content companies that have relied on rights fees covering all subscribers are seeing eroding revenues, and there's not much they can do about it. Hence stories like more layoffs at Disney's ESPN.
mpouraryan
3/8/2017 10:34:08 AM
User Rank Platinum
Re: Skinny Bundles
I am curious to see what the community thinks about the new YouTube service--and this is as the "disruptors" (Netflix/Amazon) are not sitting idly by?
mpouraryan
3/8/2017 10:35:48 AM
User Rank Platinum
Re: Skinny TV Salvation
..and To humbly add @ADI, how they're trying to be creative--for instance Discovery just spun off a new "APP" called curiosity. The intellectual capital they have is quite extra ordinary to mine--isn't it?
mhhf1ve
3/8/2017 11:20:41 AM
User Rank Platinum
Re: Skinny TV Salvation
This Disney situation seems unsustainable in the long run, so it looks like Disney (and other content owners) may have to diversify their businesses? I don't think Disney is a target for a telco merger because it's too big already, but maybe we'll start seeing more Disney hardware someday? Like Disney tablets that compete with Nintendo? Or I guess we'll just see Disney continue to expand into MMO games and software...
Re: Skinny TV Salvation
@dmendyk - I don't see Disney as really going anywhere, even if they are currently profitting from being in bundles that are large with viewers that aren't even watching them specifically. They are far too huge in family circles to even be remotely damaged by skinny bundles. Not to mention the ease of providers creating a family package with Disney included. You could even break the Disney channels up to offer lower priced packages. Disney Jr. does a really good job of targetting kids my kids age, so when we had cable, we spent most our time on Disney Jr. and honestly never even lingered on Disney XL because there was nothing on there that my kids had any interest in. So even the people that are currently watching Disney with the bigger bundles, aren't necessarily watching all the Disney channels. There are a lot of options out there for Disney right now, they'll be fine.
Ariella
3/9/2017 8:45:47 AM
User Rank Author
Re: Skinny TV Salvation
@mhhf1ve Media is a big chunk of Disney's overall business, but it's not all of it, as evidenced by the pie chart that was replicated in http://marketrealist.com/2016/05/disneys-revamped-business-strategy-star-wars-franchise/
According to that article, the real differentiator for Disney is its intellectual property:
Disney's value proposition
Disney stands out from its competitors in the media industry because of its large amount of intellectual property. The company monetizes these assets successfully across its segments. It accomplishes this through the creation of content that uses its intellectual property, whether it's retailing merchandise, console games, or attractions at its theme parks that showcase Disney characters.
batye
3/9/2017 8:52:37 AM
User Rank Platinum
Re: Skinny TV Salvation
@Ariella thanks for sharing as visial learner it very easy to see and comprehend it - in my case :) - thank you... ps: for me Disney is like it own Country or force of nature... almost the same as Google or Amazon...
Ariella
3/9/2017 8:57:30 AM
User Rank Author
Re: Skinny TV Salvation
@batye you're most welcome. I think Disney used to hold more influence than it does now because there is so much more stuff out there competing for our attention, though it is growing in its own way.
mhhf1ve
3/9/2017 11:44:27 AM
User Rank Platinum
Re: Skinny TV Salvation
Thanks for looking up that Disney info! I knew roughly some of those numbers but it's nice to see how it all divides up.
Re: Skinny TV Salvation
dmendyk,
"On demand, skinny bundles, etc. are damaging that phantom revenue stream."
A fussy point of language: the revenue is absolutely real. It's the viewership that's phantom. And the bills go to real viewers, who do not like discovering they are phantoms.
A major problem for Disney is that to keep being Disney, they have to remain the default/ground entertainment space for childhood-thru-young-adult, which means prices have to stay low enough so that there is no sizable number of "Disney-deprived" children; so much of their marketing strategy is based on owning the whole space. So if they go a la carte, they have to keep prices low while only selling to people who do watch Disney -- and that doesn't multiply out to much revenue.
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