Disney Aims Its Resources at Disney Plus Streaming Service

To ready the launch of its Disney Plus streaming service, The Walt Disney Company has invested in technical infrastructure and doubled down on original content. At the same time that chair/chief executive Bob Iger deemed the service “the highest priority,” he also pursued the acquisition of 21st Century Fox, which is projected to close by the end of March. Now, Disney is a very busy studio, stepping up production for the new service. Of the largest media companies’ estimated $107 billion in global content spending, Disney is responsible for 22 percent, followed by AT&T and Netflix, for $14.3 billion and $14 billion respectively. 

Variety reports that RBC Capital Markets senior media analyst Steven Cahall “estimates the company will devote about $500 million to original programming for Disney Plus in 2019.” He added that Disney will spend a projected $23.8 billion in 2019 ($16.4 billion excluding sports), making it “the biggest spender among media giants on content.”

“Disney spends more on content than anyone else globally,” he said. “It has decades of experience in making excellent content, it has a huge balance sheet with low leverage and it’s a brand that’s known the world over.”

Although Iger is pursuing “The Mandalorian,” the first live-action “Star Wars” series, he has also stated that Disney Plus “will not try to match Netflix in terms of sheer volume of originals.” Iger is looking for the majority of content to come from the creative teams at Disney, Marvel, Lucasfilm and Pixar, and Fox’s FX, Fox Searchlight and National Geographic (including its archives). Movie budgets include some in the “$20 million to $60 million” range. Disney Studios president of motion picture production Sean Bailey will “play a major role in liaising with the imprints and helping to steer the movies strategy.”

Disney Channels Worldwide will also play a role in productions. With regard to series, “Disney ultimately settled on a formula for ‘buying out’ points up front,” similar to Amazon, HBO and Netflix. Marvel and “Star Wars”-branded productions will offer generous formulas and pay scales, but “other productions are offering less lucrative deals than comparable projects would likely command at Netflix or Amazon.”

Elsewhere, Variety reports that Disney, which said the streaming service will “be viewable by a wide age range,” is “prepping a number of shows and films it hopes will have broad family appeal.” In addition, it will have 5,000 hours of the studio’s “trove of classic material” and be “the exclusive streaming home of upcoming theatrical releases like ‘Avengers: Endgame’ and the ‘Aladdin’ remake.”

Disney is also using the streaming service to feature actors of color, “to welcome a wider audience,” as well as “continue to build out its various expanded universes” with “Star Wars” and Marvel properties.

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