Disney came out with its second quarter 2021 results shortly after Faultline went to press last week, in an issue which saw us contentiously agree with the public pasting Disney had just received from billionaire shareholder Daniel Loeb, via his private equity group Third Point. In the days since, Disney’s latest performance has been digested with the usual ballyhoo – subs = up, revenues = up, problems = none.
Indeed, the growth of Disney+ from 57.5 million subscribers as of June 2020, to 116 million as of July 2021, is an eye-catching growth curve that has prompted some to project that Disney+ might even overtake Netflix for subscribers in Asia Pacific by the end of 2021, as additional launches in the region await.
However, the delay to the Eastern European expansion effort for Disney+ is a rare blot on the service’s trajectory, in what is not just a slight setback but a hefty postponing of the launch from later this year until summer 2022. Disney has instead decided to prioritize launches in South Africa and several Middle Eastern countries, in a move which almost mirrors HBO Max’s.
And just like WarnerMedia’s admission of inadequacy (see separate story in this issue), we think it raises question about the scalability of Disney+. There is nothing wrong with staggering your country launches so that resources are allocated strategically to ensure a smoother experience all-round, yet Disney’s decision screams of a business bereft of confidence about becoming a truly global streaming service.
Of course, Disney has to delicately close its linear TV channels in certain regions in tandem with launching its direct to consumer offering, but any complications in negotiations with pay TV operators or broadcasters about shuttering these channels in Eastern European territories has not been cited as reason for delays by Disney. Excuses are running thin.
Even so, Disney’s linear TV channels are still operational in many developed regions where Disney+ has long launched, while next year will see more than 100 TV channels in global markets sent to the guillotine.
Peacock is arriving in Europe in late 2022, while HBO Max has delayed its launch across the Atlantic to early 2022, with no clear reasoning given by WarnerMedia execs, other than a decision to focus resources on driving sustained uptake in Latin America, which is pretty similar to Disney’s vague reasoning.
So, Disney is focusing its efforts on developing regions in the Middle East, Africa, and also key markets across Asia Pacific, while HBO Max wants to build on its strong brand presence in Latin America. It’s almost like the two are purposely not planning to step on each other’s toes. But while we believe the decision by WarnerMedia to delay the launch of HBO Max in Europe until early next year was a sensible one, based on current trends and historical lessons that tell us January should be more stable for an SVoD launch, we cannot say the same for Disney’s decision.
Disney+ is pushing back Europe by almost a whole year to summer 2022, by which time it will be showing its age having first launched in November 2019. It might have missed a lot more than the boat by this time. However, Disney is also launching Star+ throughout Latin America later this month – part of the company’s efforts to create synergies between its array of D2C brand touchpoints to raise consumer awareness and increase engagement.
“The proposition that we have in Europe with Star as a sixth brand tile looks significantly different than our relatively unbundled approach that we have in North America,” commented CEO Bob Chapek, during the latest earnings call.
As you can see from the napkin-drawn timeline below, there were big gaps between the US streaming debuts of Netflix and Amazon Prime Video and their expansion into international territories, but this is because these two companies were ahead of the curve and had a lot more to battle with than streaming services do today (other than competition, but back then pay TV was still the real competition).
It took Netflix four and a half years to take its streaming offering from the US to Latin America, and a full five years before making the jump to Europe. It took another four years, to early 2016, before Netflix was properly global.
Amazon Prime Video has pretty much kept pace with Netflix toe-to-toe since fully getting into on-demand online video in early 2011, but launched internationally at a frighteningly fast pace, expanding to Latin America at the same time as Netflix, completing its European expansion at the same time, and going global in the same year.
The services in the second half of this timeline are a different breed altogether, where scaling hard and fast is a must to play catch-up with the top half. Just five months separate the US and UK launches of Disney+, before quickly expanding to MENA and the rest of Western Europe last year. HBO Max is taking a more measured approached, with over a year separating its US and Latin American debuts.
Peacock will be waiting the longest of the new crowd to make an impact overseas, from its July 2020 arrival to an estimated November 2022 expansion into Europe (albeit only for Sky customers).
January 2007 – Netflix US streaming launch
February 2011 – Amazon Prime Video US launch
September 2011 – Netflix Latin America launch
September 2011 – Amazon Prime Video Latin America launch
January 2012 – Netflix UK launch
February 2014 – Amazon Prime Video UK launch
June 2014 – Netflix expands to rest of Western Europe
June 2014 – Amazon Prime Video Western Europe launch
January 2016 – Netflix global launch
December 2016 – Amazon Prime Video global launch
November 2019 – Disney+ US launch
March 2020 – Disney+ UK launch
April 2020 – Disney+ MENA launch
May 2020 – HBO Max US launch
June 2020 – Disney+ rest of Western Europe
July 2020 – Peacock US launch
November 2020 – Disney+ Latin America launch
November 2021 – Peacock European debut
June 2021 – HBO Max Latin America launch
November 2021 – Disney+ Asia Pacific launch (planned)
January 2022 – HBO Max Eastern Europe launch (planned)
June 2022 – Disney+ Eastern Europe launch (estimate)
November 2021 – Peacock European expansion (Sky customers only)
~2025 – HBO Max UK and Western Europe launch (planned)