Disney to Reveal Plans to Turbocharge Streaming Offerings


LOS ANGELES — A significant expansion of the “Star Wars” universe. Tom Hanks as Geppetto in a live-action “Pinocchio,” and Yara Shahidi as Tinker Bell in a live-action “Peter Pan & Wendy.” Footage from new Marvel projects. A star-studded prequel to “The Lion King.”

On Thursday, as part of a four-hour investor presentation focused on streaming, the Walt Disney Company will discuss a Death Star-size trove of coming content — all of the above and more, said three people with knowledge of the matter, who spoke on the condition of anonymity to discuss private planning.

Some big-budget Disney movies will continue to have exclusive runs in theaters. (The “Lion King” project, directed by Barry Jenkins and focused on Mufasa’s back story, is a good bet.) Others will debut online. (That is where “Pinocchio” is headed.) All will ultimately serve one goal, which is strengthening Disney+, the company’s flagship streaming service.

At a time when streaming is becoming cuttingly competitive — and some of Disney’s traditional businesses are struggling — Disney hopes to use the virtual event to dazzle Wall Street: Here is a 97-year-old company making a jump to direct-to-consumer hyperspace.

Last month, Bob Chapek, Disney’s chief executive, announced that Disney+ had reached 74 million subscribers worldwide after only 11 months in operation. (Netflix took seven years to reach that threshold, and now has 195 million customers worldwide.) Disney+ has since rolled out in Latin America and grown rapidly in India, analysts say, leading some to estimate that Disney may reveal that the service is within reach of 100 million subscribers.

Disney is also expected to give growth updates on its other streaming platforms, including ESPN+, Hulu and a new general entertainment offering, Star, which will debut overseas in the coming months.

“The question everyone has now is where to from here?” Michael Nathanson, a founder of the MoffettNathanson media research firm, said in a phone interview. “We expect to see a lot more spending on content to turn Disney+ into more of an always-on service, which will increase pricing power.”

Subscriptions to Disney+ cost $7 a month. The least expensive Netflix plan is $9 a month, and HBO Max, a fledgling WarnerMedia service, costs $15.

Disney declined to comment for this article.

Investors have been licking their lips in anticipation of what Disney will unveil, including forecasts of subscriber growth. Disney shares have climbed 32 percent since the investor day was announced in August, compared with an 11 percent rise in the Standard & Poor’s 500-stock index.

Disney was trading at about $155 on Wednesday, near an all-time high, even though several of its theme park resorts (which are enormous cash generators) remain closed because of the pandemic. The company laid off 30,000 workers.

Hollywood is keenly interested in the investor presentation because Disney executives have said they will discuss an evolving approach to movie distribution. The coronavirus has forced Disney and other studios to push back the releases of more than a dozen major films and reroute others to streaming services. In September, Disney debuted “Mulan” on Disney+ as part of a “premium access” experiment, charging subscribers $30 for indefinite access. “Soul,” the latest Pixar film, will arrive on Disney+ on Christmas Day for no additional cost.

Citing the pandemic, WarnerMedia last week shifted 17 coming Warner Bros. movies to a hybrid release model — simultaneous arrival on HBO Max and in theaters — even though some of the films (“Dune,” “The Matrix 4”) are not scheduled to come out until the fourth quarter, long after vaccines are expected to be deployed. The surprise move prompted swift and severe blowback from WarnerMedia talent, who felt betrayed by the sudden switch. They also stand to receive considerably lower paydays.

John Stankey, the chief executive of AT&T, which owns Warner Media, referred to the furor as “a lot of noise” while speaking at a conference on Tuesday and predicted that WarnerMedia’s strategy would prove to be a “win-win-win.

In contrast, Mr. Chapek and Robert A. Iger, Disney’s executive chairman, will not go with a one-size-fits-all approach for movie releases in 2021, the people with knowledge of the company’s plan said.

Some titles on Disney’s theatrical slate will move to Disney+ at no extra cost. Expect “Peter Pan & Wendy,” like “Soul” and “Pinocchio,” to debut in this manner.

Other movies will take the “Mulan” route and arrive on Disney+ as premium offerings. “We’ve got something here in terms of the premier access strategy,” Mr. Chapek told analysts on a recent conference call. “There’s going to be a role for it strategically with our portfolio of offerings.”

And some of Disney’s biggest movies will continue to receive exclusive runs in theaters before arriving on the company’s streaming services. For instance, contrary to widespread speculation, “Black Widow,” a much-anticipated Marvel spectacle, will remain on Disney’s theatrical release calendar for May 7, the people with knowledge of the presentation said.

Movies are helpful in attracting subscribers, but television shows keep streaming customers paying month after month. To that end, Disney has an abundance of series on the way for its services. They include “Turner and Hooch,” an adaptation of the 1989 film about a detective and his oversize mutt; “Willow,” an adaptation of the 1988 big-screen fantasy; and eight Marvel shows based on characters like Loki and She-Hulk.

Streaming is not yet profitable for Disney — far from it. Losses in the direct-to-consumer division totaled $2.8 billion in the company’s 2020 fiscal year. Streaming-related losses are expected to peak in 2022, as rollout costs decline and content expenses normalize, with analysts expecting Disney+ profitability by 2024.

Disney has indicated that some of the money for its new content blitz will come from programming budgets at its traditional television networks. The company owns the Disney Channel, National Geographic, FX, Freeform and ABC, among others.

“We will be heavily tilting the scale from linear networks over to our direct-to-consumer business,” Mr. Chapek said on the recent conference call.

Analysts pushed for additional details. “Just hold on until Dec. 10,” Christine McCarthy, Disney’s chief financial officer, said on the call. “Hopefully we can answer all your questions then.”



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