Bob Iger said Disney’s streaming success formula is ‘Star’.

Bob Iger said Disney's streaming success formula is 'Star'.

Disney’s Streaming Success: The Rise of Star and the Future of Bundling

Investors in Disney’s fiscal Q3 earnings call were captivated by the recent Disney+ price hikes and discussions about password sharing crackdowns. However, a lesser-known revelation from the call could hold the key to Disney’s streaming success. Disney’s CEO, Bob Iger, shared a blueprint for success that has already been proven in international markets with the launch of Star on Disney+. What is Star, and how has its integration transformed Disney’s streaming empire?

Star, initially an acquired television broadcaster in China and India from Disney’s purchase of 21st Century Fox in 2019, became a central component of Disney’s streaming business outside the U.S. When it was determined that Hulu lacked recognition abroad, Disney turned to Star, incorporating it as the general entertainment section of the Disney+ interface in international markets. Since its rollout in waves beginning in 2021, Star has expanded to be available in over 70 countries, offering content from Disney properties like ABC, FX, and Freeform, alongside select third-party content based on location.

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While Disney doesn’t disclose specific statistics about Star, it’s evident that its addition to Disney+ has resonated positively with users. Disney’s international offering of Disney+ has consistently experienced growth since reporting user counts, with 59.7 million users as of the Q3 earnings call. In contrast, Disney’s domestic streaming business has encountered subscriber declines twice during the same period. Furthermore, the international Disney+ subscriber count has risen by 45% over the past two years, compared to a 7% growth in the U.S. market. While the exact impact of Star’s launch on this growth is yet to be determined, its inclusion has not resulted in a decline in subscribers.

The integration of Star within Disney+ is representative of the growing trend towards bundling multiple streaming services on a single platform. According to a 2022 Nielsen report, 64% of consumers desire more bundling options, indicating a demand for streamlined viewing experiences. Recognizing this, Disney recently announced its plans to create a unified app that offers both Disney+ and Hulu for bundle subscribers, mirroring the successful implementation of Star two years ago. This strategy aligns with Iger’s vision of combining general entertainment content (represented by Star) with Disney’s powerhouse brands and franchises such as Marvel, Pixar, Star Wars, and classic Disney fare.

The Star model on Disney+ could shed light on Disney’s approach to ESPN, its sports network. During the earnings call, Iger hinted at exploring various strategies to position ESPN as a stronger player in the streaming market, potentially involving distribution and content partnerships. If Iger follows the Star playbook, it could involve pairing top-tier sports programming on ESPN with complementary content, expanding its appeal to a broader audience.

For Disney, consolidating streaming content into a single online location like Disney+ leads to higher user engagement, lower churn rates, and greater opportunities for advertisers. A unified platform simplifies the viewing experience for users and strengthens Disney’s position as a streaming powerhouse. By leveraging the success of Star, Disney is well-positioned to become a streaming star in the ever-evolving media landscape.

In an era where viewers crave convenience and accessibility, Disney’s integration of Star on its Disney+ platform offers a glimpse into the future of streaming. By bundling content from diverse properties and creating a one-app experience, Disney has demonstrated its adaptability and strategic vision. As the media landscape continues to evolve, companies like Disney must continually innovate and capitalize on new opportunities. Through its streaming success and the lessons learned from Star, Disney is solidifying its position as a dominant player in the rapidly expanding world of streaming entertainment.