Disney Plus streaming service arrival in Mexico will shake Netflix (and pay-TV)
Disney Plus (Disney) reached the battle of content via streaming and, although for now the platform that offers exclusive content only in the United States and Canada, will reconfigure this market in Mexico, and seek to take the crown from Netflix.
The internet video platform of Mickey Mouse reaches a market that has exponential growth in the world, with annual revenues of $38.2 billion dollars in 2018, which will double by 2023, according to estimates by PricewaterhouseCoopers (PwC).
Mexico is no exception to this trend, could even surpass Brazil as the largest market of this segment in Latin America in 2022, projects the consulting firm in the study Global Entertainment & Media Outlook 2019-2023.
Although the arrival of Disney Plus in Mexico will move the players' pieces in the chess segment of the video segment on Over the Top (OTT) platforms, and will also impact the restricted television market, but will not do it alone, HBO Go accompanies it in this crusade for the attention of viewers.
These platforms offer consumers benefits different from Netflix, for starters, for the price and content itself, so that together they could take a piece of the cake from the streaming services to the company in the Mexican market.
Disney entered this market as a strong competitor based on its content, is a company that has a large number of productions and thus will take into their hands this market, arrives forcefully with their prices, which are below those of Netflix.
Disney, which participates in different segments of the entertainment market, started with the cart full of exclusive content of its different franchises, including the first episode of the series "The Mandalorian" of the Star Wars saga, and the titles of Marvel superheroes movies, which are added to the content of Fox, such as The Simpsons.
Meanwhile, Disney movies and series will say goodbye to the rest of the platforms - among them Netflix, as their contracts end, in the digital platform also considers exclusive productions that the Mickey Mouse company will have online-only for Disney Plus users.
Disney has not yet made public the date when the platform will be available in Mexico, which will be during next year, and if the cost remains in line with the U.S. market, it will have a more affordable cost compared to Netflix.
However, with its arrival in Mexico, in addition to Netflix, Disney + could impact services such as Claro Video or Blim, since these companies have their platform linked to other services, such as mobile telephony.
Meanwhile, the consumption of content in this modality continues to rise. In the First Survey 2019, Users of Telecommunication Services, the Federal Institute of Telecommunications (IFT) reported that six out of every ten users of Video on Demand (VoD) services spend up to two hours a day active on platforms.
Streaming services are not the only ones that will feel the impact of the arrival of Disney Plus. Companies offering pay-TV, which weaken in the face of on-demand services, could lose market share if their current model is maintained.
User subscriptions to these services will be worth $1.3 billion in 2023, with an annual growth of 17.9%. The figure doubles from $549 million in 2018, according to PwC.
The services of Video on Demand (VoD) have in their favor, according to the specialist, the customization of their content, which can also be consumed in mobile devices, which also have greater penetration in the country, and this increase in connectivity also plays in favor of streaming platforms.
The IFT estimates that mobile Internet access service lines will increase 12% between 2018 and 2020, to reach 98.8 million lines, this would imply a teledensity of 77 lines per 100 inhabitants.
Meanwhile, mobile telephony service lines could add 123.4 million by the end of 2020, which would represent a growth rate of 3% compared to the end of 2018 and a teledensity of 97 lines per 100 inhabitants.
On the other hand, the IFT projects a 15% reduction in the number of accesses in the restricted television service for 2020 compared to 2018, to close with 18.8 million accesses.
In order to face digital video platforms, companies that offer restricted television service must devise schemes that allow them to compete with the catalogue of OTT content, but also with the availability of the same.
The cable companies will have to expand their content and not only think about packaging themselves with other services, but also expand to other channels and work to offer a differentiated service to users.
DISNEY'S SIX KEYS TO DOMINATING THE WORLD WITH ITS CONTENT PLATFORM
At the D23 Expo, Disney's fan club, important details of the impending content platform of the leading entertainment business conglomerate were unveiled. One of the most important points was the landing date of the platform: November 12 in the United States, Canada, and the Netherlands, with Australia and New Zealand on their heels with the premiere scheduled for November 19. And, while the day that will arrive in Spain is not yet known (it could be 2019 or 2020 at the latest), here are the keys to thinking that Disney+ can sweep the world or, at least, revolutionize the content market (once again):
The most popular catalog
Not all spectators have the same problems but many certainly do. They're looking for Disney classics, the ones their kids have fun watching in a loop, and they're having more and more trouble finding them on a content platform. It's simple: Disney doesn't renew the transfer of rights to other companies because they're preparing to disembark with their classics of yesterday and today.
This means that if you want to stream all Disney movies (and the ones to come) with a reasonable fee, you'll need Disney+. The same can soon be said for Star Wars and Marvel movies. There are platforms that still have the streaming rights of some of their works but progressively all the titles will be incorporated in the catalog. And, with only animated films and children's content, homes with a family profile will already have every reason in the world to register. If you calculate the number of money parents spend on Disney DVDs and Blurays, it is clear that it will be more profitable for them to pay a monthly fee.
Another point that is not taken into account is that the series are important for the loyalty of the most attentive audience of the series but a majority of users give importance to the films. According to Matthew Ball in Redef, in the United States, the films in the HBO catalog represent 73% of screenings. It's important to have powerful titles. And how many times have we heard that a certain platform doesn't have drinkable films? With Disney this won't happen or, at the very least, the viewer will know exactly what to expect from movie premieres. And once the next Marvel, Disney, Pixar or Star Wars films have paid for themselves in theaters, the audience will know where to find them.
The most recognizable franchises
Netflix sells volume. On Amazon Prime, until Lord of the Rings disembarks, it is not yet clear what they sell. In HBO they sell quality over quantity. And in Disney, they will sell the most recognizable franchises for the public. No one expects them to produce as many series as Netflix, but they will be more appealing to a larger number of viewers. It's not for nothing that Disney and Marvel's films occupy all the seats in the 2019 blockbusters in the absence of the release of the latest installment of the new Star Wars trilogy, which is also Disney's!
The Mandalorian and the series on Cassian Andor will work better or worse but, not even if they belong to the Star Wars universe, they will acquire notoriety and greater interest than, for example, Forever or Glow, and Obin Wan Kenobi's prequel with Ewan McGregor will be an event. The lovers of the cinematic universe of Marvel will be with open arms for the mini-series of well-known characters such as The Falcon and the Winter Soldier, Hawkeye, WandaVision or Loki. And, since we don't have a new sequel in sight of Monsters S.A, it will be interesting to see if the sons and daughters of the homes pressure to see Monsters at work.
In addition, the presentation of expo D23 showed that there was an interest in promoting other brands of the company. There will be a series of High School Musical (whose title, High School Musical: The Musical: The Series, could not be hornier), we will have a series of Love, Simon thanks to the acquisition of Fox by Disney and until a new season of Lizzie McGuire with Hilarie Duff. Yes, the youngest target of the millennial will perhaps feel the need to see how this girl has advanced now that she must survive in her thirties in New York.
They do not lack the rights to exploit
If you need to rekindle ideas a little, you have intellectual properties left over to carry it out. For example, he wants to expand the Marvel universe with series focused on She-Hulk, Ms. Marvel and Moon Knight. This means that, for example, we will have the first Muslim superhero with Ms. Marvel, whose comics are cult. If there's one thing superheroes show, it's that they have multiple lives and that even the least popular can become very profitable brand images: here's Ant-Man or Captain Marvel or Black Panther to prove it.
Moreover, soon, if the first sequel to Avatar works (there are still three films to be released), they will be able to exploit James Cameron's universe on the platform as well. This is one of the virtues of having bought 20th Century Fox.
The ability to move premieres
In this imminent scenario with Netflix, HBO Max (Warner Bros' platform), Amazon Prime Video, Apple+ and Disney+, the latter has an advantage: if subscriptions in a given quarter are not convincing, they always have the possibility of transferring a film premiere to their platform. That's what they've done with the remake of Charlie Bean's The Lady and the Homeless and the voices of Tessa Thompson (Thor Ragnarok) and Justin Theroux (The Leftovers).
At first it had to be released in cinemas but, realizing that they needed star projects on the platform from the beginning and that the Marvel series would take time to produce, they announced that the dogs would fall in love from November 12 in their catalog. The same can be said of Noelle Claus, a Christmas comedy with Anna Kendrick and Bill Hader that was conceived for theatrical release.
As Disney produces titles on their own with the imaginary of which they have the rights, of which they can market their derivative products and with which they can do whatever they want, they have an ability to improvise between their different lines of business at their convenience. Perhaps they lose the millions of theatrical takings, but they allow them to give relevance to the platform, which is their short-term objective.
One episode per week
It's a change of course with respect to the Netflix model.
Television journalist Matt Mitovich was reassured when he heard that Disney+ would broadcast the series at the rate of episode per week. It is a change of course with respect to the binge-watching model of Netflix, which premieres all the episodes in one day, and seems to have its raison d'être in the experience accumulated by Netflix and HBO.
If your production model is based on trying to secure the shot with each of your premieres even if they are less frequent, it is worth not burning the content in a week. Netflix, in fact, is currently experiencing cannibalization of its contents: many do not receive much promotion, subscribers are barely aware of its existence and, even if they are a success, their conversation lasts one or two weeks.
With this broadcast model, you make sure you don't cannibalize your own premieres.
On the other hand, HBO, which has had the biggest success of recent television with Game of Thrones, used the episode per week model (in the United States, in fact, it's a channel, so it had its logic). This allowed viewers to move to the same beat, generated more discussion about plots and cliffhangers, and caused a single content to monopolize the conversation for two or three months.
If Disney is planning to release a few series with a loose budget and a fierce promotion, it makes sense that these bets are broadcast every week. In this way, they will have more options to stay on the front line until the next premiere and that all expectations do not fall on deaf ears after a precocious premiere and viewing.
A more than reasonable price
With a price of $6.95 per month in the United States, it is quite clear that Disney sees this content platform as a new way to streamline and complete its business synergy. No more selling the streaming rights of their works for other platforms to improve their brand image. And, of course, when you have a company where success in theatres as well as in the domestic market, as well as the exploitation of theme parks and the sale of merchandise, is important, making a Juan Palomo in streaming was vital.
The history of the company, in fact, will allow you to start with the wind at your back. Not only will there be people waiting to see what the platform offers, marathons with the classics and check the usability of the service: they will also have hundreds of ways to promote the service with their different lines of business.
It is important to note that Disney does not necessarily want to be the most viewed content platform. He is aware that Netflix holds this position and at the moment it is difficult to dispute it. In addition, Disney+ productions will always be for children or families, without any adult title with a more adult rating than +13. What it wants is to establish itself as the most solid, reliable and successful family entertainment company on the planet.
There will be no productions aimed at adult audiences: the aim is to attract children and family audiences.