Picture source @Visual China
text | The forefront of consumption, author | Luo Yi
In 2024, Disney will once again innovate its streaming media business. Gateway Shop, the first native streaming media shopping advertising format, has launched a test plan, which will allow consumers to Purchase goods without interrupting the viewing experience. In recent years, Disney has continuously optimized its streaming media functions, and the advertising business has also become a key focus of this content giant.
It is undeniable that from the moment Disney embarked on the path of streaming media, it has a "do it or die" radical attitude. Data shows that Disney’s streaming media business has suffered a cumulative loss of more than US$11.4 billion in the past four years, and in the third quarter of 2023, the loss was as high as US$387 million.
continues to suffer losses, and Disney can only try every means to plug the hole.
advertising business is a major way for Disney to win when the growth of streaming membership subscriptions is flat. Before gateway shop, its subsidiary Disney+ began to launch ad-free and ad-free version subscriptions. Among them, the ad-free version's subscription fee is slightly higher than the ad-supported version.
2023 is the year with the largest investment in advertising technology in Disney’s history, including the marketing data platform and Metaverse. Is the content giant really going to “bring goods”? Everything seems to be in order.
Is Disney’s “carrying goods” business easy to do?
After a hundred years of ups and downs, Disney obviously does not want to grow old. Last year, pressure, doubts, challenges, changes... all came from nowhere. In the third quarter of 2023, Disney suffered a net loss for the first time. According to
data, in the third quarter, Disney’s net loss attributable to its parent company was approximately US$460 million, and its net profits in the first two quarters were US$1.279 billion and US$1.271 billion respectively. As for revenue, it was also the first time since the beginning of 2018 that consecutive revenue fell short of expectations. Revenue in the fourth fiscal quarter was US$21.24 billion, a year-on-year increase of 5.7%, which was lower than the expected US$21.33 billion.
Disney is determined to repair this tragic situation. Not only has it carried out large-scale layoffs, but also its streaming media business, which has always been based on "burning money" as its main strategy, has to come out to experience its leadership. In 2024, Disney has an ambitious goal: to Turn losses into profits in the field of streaming media.
Among them, the advertising business undoubtedly bears most of the hope. Previously, Disney+ once again increased the subscription fee for the ad-free version, while the package for the ad-supported version has not changed much. The fundamental goal is to increase the number of subscribers of the ad-free version and attract the favor of "financiers". The effect of
is immediate.
According to data officially disclosed by Disney, Disney+’s low-price plan with advertising has added 2 million new users, pushing the total number of subscriptions to 5.2 million. The average monthly income of a single household in Disney+’s core rose slightly by 2% to US$6.70. Even Disney+ +hotstar also increased 19% to $0.70. On the
advertiser side, as early as 2022, Disney has added 1,000+ advertisers because of its switch back to the "semi-advertising model". There are more than 5,000 brands on all streaming media platforms, 1/3 of which have purchased programmatic advertising. Among them, Disney+ has launched advertising options in cooperation with more than 100 brands, including Walmart, Procter & Gamble, Macy’s, Airbnb, Mattel, Google, Red Bull, Honda, Target, Marriott, Taco Bell, Tiffany & Co., etc. .
It is reported that some brands have also participated in the beta version of gateway shop, such as Unilever.
However, Disney is currently frantically expanding its advertising business to fill the deficit of streaming media, and there are still many problems to face. The platform's subscription growth bottleneck is the first to bear the brunt. Data shows that although the number of Disney+ subscribers reaches 150.2 million, this is the result of Disney's "bundling" of Disney+, ESPN+ and Hulu Live services.
As of the end of March last year, the total number of Disney+ subscribers was 157.8 million, significantly lower than the 163.5 million previously estimated by analysts, and a 2% decrease from the same period a year ago. At the same time, Disney must also be wary of the increasingly saturated streaming media market and its powerful competitors. Taking Netflix as an example, in the first quarter of 2023, Netflix’s total number of streaming media paying users reached 232.5 million, surpassing the Disney.
More importantly, overseas streaming media giants led by Netflix have broken the previous ad-free model. In fact, before Netflix and Disney, another major streaming media platform in Europe and the United States, paramount+, had already launched a paid In terms of advertising business, NBCUniversal plans to try a shopping model similar to Disney and reach cooperation with Wal-Mart.
Looking around the entire European and American streaming media field, while Douyin and Kuaishou are busy live broadcasting and selling goods on the other side of the ocean, the other side is also actively laying out a new round of profit links: retail + streaming media. It is reported that Amazon is rapidly entering the field through Prime The e-commerce platform netflix.shop...
is surrounded by enemies and is facing opponents. This is obviously not a good thing for the ambitious Disney.
explores the "potential of bringing goods"?
Although the domestic e-commerce model led by live streaming has long been in full swing and has gradually developed into a reshuffle and elimination period, the new overseas e-commerce track is still in its infancy. McKinsey data shows that by 2022 U.S. social e-commerce sales reached 45.7 billion U.S. dollars, and it is expected that this number will reach nearly 80 billion U.S. dollars by 2025, accounting for 5% of the total U.S. e-commerce.
Looking at my country, some organizations have predicted that by 2025, the share of live streaming alone in e-commerce will reach 25%, with an annual scale of 4.25 trillion yuan. This sharp contrast also means that the European and American "broadcasting" market still has huge development potential, so much so that the entire streaming media circle is rushing to chase it.
For now, Disney’s competitiveness is quite strong.
First of all, in addition to Disney+, Disney’s streaming media platforms also include hulu and espn+. The former is a streaming media platform that Disney bought from AT&T for US$1.43 billion in 2019. The content is more adult-oriented in order to expand its presence in the family. , subscription groups outside the children’s market.
espn+ has always focused on the sports category, and its members are mostly young men. Families, children, adult men, women... Disney has at least gathered several major groups in the consumer market in the field of streaming media. Last year, only 17% of Netflix users had an annual income of more than 100,000 US dollars, while Disney+ accounted for nearly 4% one.
Therefore, Disney is favored by some luxury brands. Previously, disney+ had just launched its advertising business, and luxury brands such as lvmh, Tiffany and Chanel became its first customers. On the other hand, Disney+, which has more far-reaching content, also costs less at $50/cpm compared to Netflix’s $65/cpm.
Interestingly, a survey conducted in 2023 showed that 75% of viewers believed they would prefer to see interactive content ads rather than standard ads. This requires the streaming media platform to not only have a traffic pool, but also have a certain content atmosphere. In this regard, the development path of domestic live broadcast delivery is a typical example.
Of course Disney is a big producer of content, which is the most regrettable thing.
In the past few years, Disney has frequently overturned in its industry. According to media statistics, from 2020 to 2023, no Disney movie has a box office of more than 1 billion US dollars. Only "Doctor Strange" has a box office of more than 1 billion US dollars. $950 million. "The Little Mermaid" was even ridiculed around the world. According to data from
Lighthouse, "The Little Mermaid" was released in China for three days, and its first weekend box office revenue was only 16.98 million yuan. The high-profile "Wish" also suffered the same treatment. During the Thanksgiving holiday, which was supposed to be the hottest, "Wish" only achieved a box office of $31.7 million.
Disney’s “star-making” myth is dying. This is the anxiety of the century-old giant. Especially compared with its past glory, Disney's movie box office totaled US$3.74 billion in 2019, accounting for one-third of the global movie box office; but in the last month of 2023, Disney's share of the global movie box office is less than 15%.
In the competition of streaming media business capabilities, in the final analysis, it still depends on content. Unfortunately, Disney is gradually losing its once most unique advantage.
competes for few consumers?
Domestic live streaming has reached a climax one after another, with more content and social networking, almost refreshing the concept of e-commerce again and again. The overseas streaming media forces represented by Disney+, Netflix, and YouTube are finally collectively competing for e-commerce retail. At the same time, they are also working hard to retain consumers who are becoming increasingly quiet.
There is no doubt that the cold wind of consumption downgrade is sweeping the global market.
Taking Black Friday as an example, statistics from the data agency adobe statistic show that on the day of "Black Friday" in 2023, U.S. online sales increased by only 7.5% year-on-year. Amazon even did not want to publish its own sales data at one time. According to amz123's survey statistics, recently Forty percent of Amazon sellers experienced a decline in sales during Black Friday, with 14.33% of sellers experiencing a drop in sales of more than 50%; only 25.32% of sellers saw an increase in sales.
North American consumers are also tightening their pockets. A CNBC survey showed that 92% of consumers said they were cutting back on spending. Nearly 80% of consumers have reduced spending on non-essential goods, including entertainment, home appliances and clothing; the proportion of consumers who have reduced spending on necessities such as groceries, utilities and natural gas has also reached 67%.
Even if it is necessary to consume, "low price" has become the main demand of North American consumers.
During last year’s Black Friday promotions, most retailers such as Best Buy, Lowe’s, and Nestlé offered deeper discounts than before. Target Department Store, beauty retail giant Ultabeauty, etc. launched flash sales promotions for certain brands and products. Offers 24-hour limited time discounts.
Disney wants to have first-hand content and first-hand retail. What faces them is not only their own transformation limitations, but more importantly, the entire deserted consumer market. And once the desire for consumption is annihilated, the e-commerce retail field will fight to the death, and the struggle between fish and net will inevitably become fierce.
On the one hand, Disney has added the function of carrying goods on the streaming media platform. Opposite to it are traditional e-commerce giants such as Amazon. In the past few years, Amazon has been crazy about establishing its own streaming media circle and has spent huge sums of money on acquisitions. As for MGM, data shows that MGM has more than 4,000 movies and 17,000 TV series. After
acquired MGM, Amazon will be able to provide more than 55,000 movies to Prime members, a number that even far exceeds the approximately 20,000 movies owned by Netflix. Today, traditional retail giants are desperately trying to maintain their user numbers, and Wal-Mart is no exception. Disney is getting involved in retail, and they are preparing for content.
It is reported that Walmart has joined forces with Paramount. Paramount Pictures currently owns the copyrights of more than 3,000 movies, including "Titanic", "Tomb Raider", "Mission: Impossible" and "Transformers". It hopes to pass Bundled subscriptions enhance the value of Walmart+ membership.
On the other hand, the global consumer market is in depression, and various cross-border e-commerce companies are also swimming in groups like catfish. Shein, tik tok, temu and other platforms have become the biggest winners in the North American consumer field. In addition, local facebook, instagram, and poshmark have joined the live broadcast to bring goods.
What’s interesting is that it is difficult to mobilize the enthusiasm of overseas consumers by changing their shopping methods.
There are still noisy live broadcast rooms in China, which make people unable to extricate themselves in a short time. However, overseas, most consumers are still stuck in the traditional e-commerce consciousness. Taking live streaming as an example, data shows that only one-third of American adults understand or have heard of live streaming shopping, and nearly 80% of American adults say they have never participated in a live streaming shopping event.
This makes the already inactive consumer market even worse. Looking at it, there is only the cruelty of the giants fighting and a pale smoke.
