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Tuesday, November 12, 2019

Disney+: How Bob Iger Is Betting His Company’s Future on Your Nostalgia

Disney’s long-awaited streaming service is finally here — but do fans love Mickey enough to validate Bob Iger’s billion-dollar gamble?

During his tenure as CEO, Iger has assembled the Avengers, lassoed Sheriff Woody and even conquered a galaxy far, far away. Now, he is going to need all of them to come together to help Disney tackle its greatest challenge yet: to topple Netflix for streaming superiority.

Disney+ is bringing an onslaught of content that includes originals like the “Star Wars” spinoff “The Mandalorian” and a new “High School Musical” series. Oh, there’s also “Lady and the Tramp,” Disney’s latest animated classic to get the live-action film treatment, and a slew of docuseries that are centered around Disney itself.

“These brands confer a huge benefit to us, and they also confer boundaries to us,” Kevin Mayer, chairman of Disney’s direct-to-consumer and international business, told TheWrap during a Q&A with reporters. “Brands only mean something if they’re focused and if they do have boundaries.”

Disney+ is under a lot of pressure to succeed and not only because Iger has labeled it as the company’s most important initiative. Disney is forgoing almost an entire revenue stream — licensing its content to other outlets — on the bet that enough customers will fork over a monthly fee to make up the difference. Disney expects to lose $150 million from its overall revenue this year by getting rid of its output deals. The company is sinking $1 billion into original content next year and will raise that to over $2 billion by 2024, the same year it expects to turn a profit.

It’s not only Iger’s legacy at stake, but also Mayer’s future, which could include getting the keys to Walt Disney’s kingdom. Iger is supposed to step down as CEO in 2021, though he’s pushed that date back before. That has set off the latest round jostling among Disney executives, and Mayer’s ability to deliver on Disney+ will go a long way.

Wedbush analyst Daniel Ives believes that Disney needs to get to 20 million subscribers during its first year. “Success is going to be grey, depending on the view,” he told TheWrap. “If I had to put a line in the sand — 20 million subscribers.” Disney is projecting to have between 60-90 million subscribers globally by 2024.

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Disney has an almost symbiotic relationship with its consumers, one that it has carefully cultivated over decades. After all, you’d have to go to the Forest Moon of Endor to find someone who has never heard of Tony Stark or Buzz Lightyear. Iger is betting his company’s entire future on just how much viewers love all things Disney.

And at the beginning, that will mostly consist of Disney classics, which will need to be enough to justify the $7-a-month price tag. But even when Disney+ begins to roll out more original content in the years ahead, the service will be heavily tied to the company’s five main brands — Marvel, Pixar, Star Wars, Nat Geo and Disney itself.

“Every single show that we do and every movie that we make is going to live under those brands,” said Ricky Strauss, the president of content and marketing for Disney+ who is spearheading original content with senior vice president Agnes Chu.

“That’s something that we want to lean into. That’s not constricting, in fact, that’s one our superpowers,” Chu added. “There’s other ways to express our attributes within the Disney brand. That optimism — ideas that are about heartfelt families, or musicals or a fairy tale romance — we can certainly extend what we have, but we can also find new ways of expressing those storytelling experiences.”

“High School Musical: The Musical: The Series” showrunner Tim Federle’s approach to the reboot is one example of what Chu means. The series is a super-meta take on the popular Disney Channel film franchise, which sees high school students stage a production of “High School Musical” (more on that here).

Federle said he was given quite a bit of leeway — he was even allowed to include curse words (though they’ll be bleeped out). “It’s sort of PG+,” he told TheWrap of the new show. “It’s still Disney, but rather than being a watered-down version of ‘Riverdale,’ I want to be this robust version of Disney. We’re a teen show that cast real teenagers. It’s a family audience.”

Disney+’s biggest launch is Jon Favreau’s “The Mandalorian,” the first-ever live action TV show set in the “Star Wars” universe. It’s proof that Disney+ will sink or swim on the backs of Marvel, Star Wars and Pixar.

Alberto E. Rodriguez/Getty Images for Disney

When it comes to Marvel, what other streaming service can boast that it’s part of the most popular film franchise in the world, one that dethroned “Avatar” as the highest-grossing film of all time? Shows like “The Falcon and The Winter Soldier” and “WandaVision” will be just as important to the Marvel Cinematic Universe narrative as upcoming films like “Thor: Love and Thunder” and “Doctor Strange and The Multiverse of Madness.”

Marvel Studios is currently slated to produce eight series for Disney+, which will kick off next fall with “Falcon and Winter Soldier,” with three more to come in 2021. While “Falcon and Winter Soldier” and series like “Loki” and “WandaVision” all star characters from the films and will most likely be one-and-done, series further down the road like “Ms. Marvel” and “She-Hulk” are planned as multi-season series.

“Disney has the opportunity to do great things with Disney+,” Leslie Iwerks, who directed “The Imagineering Story” docuseries, said. “They have more assets and more vertical integration of their IP than most any other studio out there.”

Few people understand the legacy of Disney better than Iwerks, the daughter of former Disney exec Don Iwerks and the granddaugher of Ub Iwerks, who co-created the original Disney mascot Mickey Mouse. “Of course it’s a hugely important and very smart decision that I think Bob Iger is putting a lot of his energy and money behind.” She believes it’s “kind of perfect” that Netflix and Amazon “helped pave this road for streaming,” and now Disney can slide right into this new era.

Disney altered its development to shuffle things toward the streaming service. The Kristen Bell-hosted “Encore” was originally an ABC one-off special, “Lady and the Tramp” had been tapped for a theatrical run. “The Imagineering Story” docuseries was also tweaked to fit Disney+. Iwerks began filming five years ago, well before Disney+ was a twinkle in Iger’s eye. Then Chu, who was with Imagineering when the project started, got tapped to run Disney+ content, and she convinced Iwerks to move it over.

“We were thinking in these early meetings that maybe it would be for Netflix,” Iwerks explained, adding that Chu quickly called her after she moved over to Disney+. “She says, ‘You’re never going to believe this, but I’m over at Disney+ now and we think your series would be perfect for the network.”

Disney is not the only company getting into the streaming game. Apple finally launched its own streaming play on Nov. 1 and HBO Max and NBCUniversal’s Peacock are coming next spring. That’s not to mention the behemoth that is Netflix, whose rise has pulled the entertainment industry into this new streaming era, plus other deep-pocketed competitors like Amazon.

Disney has been taking sign-ups for Disney+ since the D23 Expo in August. Lines stretched across the convention floor, signaling that on Nov. 12, Disney+ expects to have a sizable subscriber base.

But Disney has never built a tech product of this size, which is why its acquisition of BAMTech two years ago was so important. The tech company, which was renamed Disney Streaming Services, is considered among the best in the industry, powering MLB.tv, HBO Now and WWE Network. Michael Paull, president of Disney Streaming Services, said those years of institutional know-how should enable them to handle what they expect will be a massive Day 1.

“We’ve done pay-per-view with ESPN+, we’ve seen some really big spikes with those events,” Paull said. “We’ve used that as an opportunity to continue to refine our capability, both in terms of being able to allow people to sign up — a lot of people sign up in a small period of time — as well as lot of people pressing play on one specific piece of content at the same time… We have spent a lot of time preparing for this launch.”

Now that the launch has finally happened, we’ll see if Iger biggest wager yet will blast off Disney to infinity and beyond.

Related stories from TheWrap:

Netflix Rivals HBO Max, Disney+ and Apple TV+ All Plan to Kick Our Binge-Watching Habit

Marvel Finds Head Writers for ‘She-Hulk’ and ‘Moon Knight’ Disney+ Series

Disney+ Will Be Available on Amazon Fire TV, After All

Source: the wrap feed