Matthew Ball
Appearances
Decoder with Nilay Patel
Disney Is a Tech Company?
There was a belief that streaming would continue to grow single, two, three, four percentage points of all video, but that pay TV would still remain the dominant form of access. That Netflix was too far behind in terms of reach, in terms of development expertise, in terms of original content to ever wage a significant war against Hollywood, let alone curb the dominance of pay TV.
Decoder with Nilay Patel
Disney Is a Tech Company?
It's unquestionably true that the licensing decisions that Disney and others did with Netflix... accelerated the decline of their traditional business, and enabled Netflix to become the company it did today.
Decoder with Nilay Patel
Disney Is a Tech Company?
When you take a look at the start of the streaming wars, there's no official date, of course, but we tend to discuss it as starting at the end of 2019. Well, that's because we had, in a matter of weeks, Apple TV+, then Disney Plus launch. In the second quarter of the following year, we had Quibi, we had HBO Max, we had Peacock.
Decoder with Nilay Patel
Disney Is a Tech Company?
It's not just that Netflix was enabled for too long. It's not just that traditional media was too slow to launch their streaming services. It's that they all waited, all launched at the same time. and therefore made it harder, more expensive, and more patience-testing for any one of them to thrive and succeed.
Decoder with Nilay Patel
Disney Is a Tech Company?
They launched at a time of peak competition, and that meant the churn was much higher, the strain on a balance sheet was harder still, and shareholder scrutiny was about to be higher than ever.
Decoder with Nilay Patel
Disney Is a Tech Company?
The launch of Disney Plus was one of the most remarkable achievements we've ever seen in Hollywood.
Decoder with Nilay Patel
Disney Is a Tech Company?
And Reed Hastings, the founder and CEO of Netflix, said that if you had asked him at the time Disney Plus launched, what were the odds of getting there? He said it would be zero.
Decoder with Nilay Patel
Disney Is a Tech Company?
At the end of the day, one of the Core problems with the streaming wars, or the biggest challenges faced by Hollywood, was that outside of the bundle, every company was a choice by a customer.
Decoder with Nilay Patel
Disney Is a Tech Company?
No customer sat there saying, I want all of the films and TV series from that studio or this studio. I want to surround my child's life with the IP of that 80-year-old studio. But Disney was the exception.
Decoder with Nilay Patel
Disney Is a Tech Company?
In the two years since Iger returned, they've close to doubled the price point for Disney+. He has communicated very clearly that their priority is no longer matching the number of subscribers that Netflix has, but making sure that the subscribers that Disney Plus has today value it properly.
Decoder with Nilay Patel
Disney Is a Tech Company?
There are still few customers who will say they're happy Disney's price has doubled since it launched, but I think most will tell you that they can't imagine getting rid of it as long as they have kids.
Decoder with Nilay Patel
Disney Is a Tech Company?
There still isn't a broader story of how Disney, a now 100-year-old company, is not just going to endure for another 100 years, but is going to be a bigger and more important, more essential business reaching more customers.
Decoder with Nilay Patel
Disney Is a Tech Company?
One thing that I think time has forgotten is that Walt never really envisioned the business as just about the production of linear content. I don't just mean his famous 1957 diagram of the Walt Disney Company flywheel, but even when you go to the first feature films that they produced, he always imagined that content experiences were transformative, that they were felt in the real world.