Iger was right that Disney+ was a significant shift in the nearly century-old entertainment company’s focus. But he was wrong about one thing: Disney+ isn’t the future of Disney. It’s the present.
Although the rest of the company was hobbled, Disney+ thrived.
A great big beautiful tomorrow today
As consumers were stuck at home, the service — which houses beloved brands like Disney Animation, Marvel Studios, and Star Wars — was pushed to the “absolute forefront of the company,” according to Jeffrey Cole, the director of USC Annenberg Center for the Digital Future.
“It’s become the central part of Disney,” Cole told CNN Business. “Most of us anticipated it would take two or three years to get to these subscription levels, to be this central, to be an important source of revenue, to become a part of the culture — and it happened in months because of the pandemic.”
The pandemic forced Disney to “pivot faster,” said Trip Miller, a Disney investor and managing partner at hedge fund Gullane Capital Partners.
“Disney+ has been the one shining star in the Disney empire in 2020,” Miller told CNN Business. “The advent of the Disney+ platform could not have come at a better time.”
In some ways, the stars aligned. As Miller put it, “it seems like half luck and half brains, from a timing perspective.”
To 2021 and beyond
Disney+ could end up losing $2 billion for its parent company this year and another $2.2 billion in fiscal year 2021, according to estimates from media research firm MoffettNathanson. We’ll find out more Thursday afternoon when Disney reports its quarterly finances.
Disney projects its service will become profitable sometime in its fiscal 2024 year. Michael Nathanson, a media analyst and founding partner of MoffettNathanson, concurs.
“I think Disney+, and the rest of their direct-to-consumer assets like Hulu and ESPN+, are the most important units in the eyes of investors,” Nathanson told CNN Business. “It’s a source of long-term growth and helps offset [factors like] cord-cutting and shifts in audience behavior.”
It’s not only helped keep Disney afloat in the most challenging of years, but also quickly bridged the gap between what Disney is and what Disney will become.
“They are really all in now,” Nathanson said. “Disney has built a lifeboat that gets them through the current storm in traditional media.”