Written by: Eric Seitz
A look at the place that streaming services hold in society and their financial impact for corporations like Disney
Streaming services are trendy. Attractive and buzzworthy, they’re like the mannequin challenge of 2016 — initially a suave, niche idea, but as time progressed, the internet grew inundated with yet another corporation attempting to capitalize on a been-there-done-that trend. Despite the oversaturation, streaming services have staked their ground in the realm of entertainment. As the powerhouse that is Netflix continues to increase its user base, other entertainment giants like HBO and Disney carve out audiences of their own from a society flooded with access to instant entertainment.
Despite the oversaturation, streaming services have staked their ground in the realm of entertainment.
Though the existence of streaming services was already on a trajectory to whittle away at the box-office numbers, the COVID-19 pandemic appears to have expedited the demise of traditional film viewing. Warner Bros. Pictures broke the internet late last year when they announced their entire slate of 2021 films (including “Godzilla vs. Kong,” “The Suicide Squad” and the upcoming “Dune”) would drop day-and-date on HBO Max at no extra cost to subscribers. While the preemptive time-of-death declarations that movie theaters faced turned out to have been exaggerated — much thanks to the recent box-office success of Disney’s “Shang-Chi and the Legend of the Ten Rings” — the sustained blow that the movie theater industry is suffering still looms.
“Shang-Chi” comes off the heels of Disney’s ongoing lawsuit with “Black Widow” lead Scarlett Johansson over the royalties she received (or, DIDN’T receive) due to the movie’s lackluster performance in theaters. Unlike “Shang-Chi,” “Black Widow” saw day-and-date release on Disney+ (for an extra $30), meaning fewer people would head out to see it in theaters than if the film had seen a theater-only release. This only affects Johansson because a tenet of her contract for the film stated that she would receive a bonus depending on how well the film did in the box office. Johansson’s representatives claim that she is losing out on over $50 million.
But what does this mean for streaming? Lawsuits notwithstanding, did Disney benefit from tossing theatrical releases like “Black Widow,” “Jungle Cruise” and “Raya and the Last Dragon” on Disney+? Is it a short-term benefit, or are these moves signs of Disney focusing on the long game?
Disney+ launched in fall of 2019, flooding pop culture with waves of nostalgia from the likes of “Hannah Montana,” “Star Wars” and “Monsters, Inc.” Over time, the platform heralded new content, like “The Mandalorian,” “High School Musical: The Musical: The Series” and the slew of Marvel Studios offerings.
“The Mandalorian” was the platform’s first heavy hitter, and millions flocked to Disney+ solely for its shiny new canon Star Wars content. However, the series’ money-making potential comes less from its ability to draw new subscribers in, and more from its place as a vehicle through which to sell more Star Wars merchandise. From the adorable allure of Baby Yoda to the collectibility of Mando’s helmet, “The Mandalorian” is more than just a series — its value as a merchandise seller outweighs its value as a subscription increaser.
The MCU is a 25 movie-high monolith that rakes in cash from every corner of America.
The Disney+ offerings in question the most are its Marvel series — the theory-churning “WandaVision,” the socially relevant “The Falcon and the Winter Soldier,” the timey-wimey “Loki” and the Let’s see how many times we can kill Iron Man “What If…?” Sure, each of its four current shows have spawned their own merchandise, but we’re not seeing Alligator Loki plushies every tenth step we take. The MCU is a 25 movie-high monolith that rakes in cash from every corner of America. If the movies make so much, what good do a bunch of shows starring its B-tier cast (and I say that with a passionate love for one Paul Bettany) offer?
From Marvel Studios’ perspective, the decision to create a television series stems from four main financial incentives — garnering new subscriptions, selling merchandise, increasing brand recognition and maintaining the relevance of characters (this last one’s important).
“WandaVision” spurred the largest spike [in DIsney+ subscribers]...increasing the service’s user base by 8 million...
As the MCU’s first Disney+ Original, “WandaVision” spurred the largest spike of the four shows, increasing the service’s user base by 8 million subscribers. At the time “WandaVision” hit the platform, though, Disney+’s subscriber count was at 86.8 million. That, coupled with the fact that many subscriptions are shared among friends and family (heck, I have someone on my plan whose last name I don’t even know), means that the subscriber increase brought on by adding several installments of new MCU content to the platform each year can’t be the primary reason for Disney’s ardent focus on streaming.
In a franchise like the MCU, brand recognition is everything. It’s why comic lovers who lost their minds at the appearance of Thanos in “The Avengers” returned for its sequel and its sequel’s sequel ... (and the one where Iron Man dies). Series like the Disney+ offerings increase that recognition. Fans who adored the romance of Wanda and Vision in “Infinity War” subscribed to Disney+ to watch their story continue in “WandaVision” — we already know that. But it goes one step further: those who watched “WandaVision” will now buy tickets to see Wanda in the upcoming “Doctor Strange in the Multiverse of Madness.” Likewise, “The Falcon and the Winter Soldier” is the link between “Endgame” and the untitled fourth Captain America movie, starring Anthony Mackie as the new Captain America.
Hopefully the Mouse House can see through the lines, graphs and numbers to understand the real value that consumers place on its properties: their power to connect with viewers.
If “WandaVision” hadn’t happened, would fans care as much about her “Doctor Strange” appearance? Further, would a Wanda appearance make sense without the context “WandaVision” provided? Every MCU product — whether film or series — is a vehicle for decades-old characters rooted in the comics. Each installment keeps them alive and renews their relevance in the pop culture scene. Before the character’s death, Loki was a cult favorite among fans. The series “Loki” is a sign of Marvel Studios ensuring the character remains top of mind for his millions of admirers.
Gauging the financial impact of a single series or film is impossible, as no hard data exists on the cultural relevance of the Winter Soldier (or any licensed material, for that matter). However, Disney’s strategy for the streaming scene is to play the long game. Returns on investments may not make themselves apparent in the short run, as subscription numbers continue to increase only slightly. But how much of the value of a film or series is placed on its ability to increase subscriber numbers? To investors, probably a lot. To Disney itself? Hopefully the Mouse House can see through the lines, graphs and numbers to understand the real value that consumers place on its properties: their power to connect with viewers. Just ask the crowded auditorium full of sobbing adults at the end of “Avengers Endgame.”