Disney Mulls Free Streaming Option Amid Industry Consolidation
Disney is considering adding a free option to its streaming service Disney Plus as a way to attract more people. This was confirmed by CEO Josh D'Amaro during the company's third-quarter earnings call.
A free offering could help drive top-of-funnel Disney Plus subscriber growth, according to D'Amaro. He added that while box office flops like Star Wars: The Mandalorian and Grogu didn't meet expectations, they prompted growth in other areas of the business such as merchandise sales and visits to Walt Disney World's Millennium Falcon attraction.
The company is also partnering with TikTok to bring Disney-themed content into the Disney Plus app. These videos will be available in a new section called Verts and will roll out in a pilot program in the US later this year.
Disney's move comes as the entertainment industry continues to consolidate, with Fox acquiring Roku for $22 billion and Warner Bros. Discover being sold to Paramount SkyDance. D'Amaro said that despite these changes, he believes a more consolidated industry is beneficial and will allow Disney to focus on building its streaming service.
Disney's streaming-related earnings increased by 11% in the third quarter to $5.53 billion, with the company also seeing growth in other areas such as merchandise sales and visits to Walt Disney World.