Kickstarter is one of the leading crowdsourcing platforms, giving individuals the opportunity to support ideas and projects that interest them. Traditionally, once a campaign ended, there was no direct way for supports to continue to make contributions directly through Kickstarter. Some projects turned to third-party options for ongoing support, but now Kickstarter has eliminated the need to take that extra step.

The company announced the change in a blog post:

The end of a campaign shouldn’t mean the end of support.

In April, a select group of Creators started testing Late Pledges, a new feature that allows Creators who successfully hit their funding goal to continue collecting pledges after their campaign officially ends.

In the past, Creators have turned to third-party services to collect funds post-campaign but our Late Pledges feature is integrated directly into Kickstarter, erasing the need for third-party players and embedding a streamlined process right where your community is already supporting you.

The early results have been really promising: Within two weeks, one Creator raised an additional 35% of their original goal with Late Pledges.

Today, Late Pledges is now available to all Kickstarter Creators globally. Now, every Creator that successfully meets their funding goal has the opportunity to keep the momentum going, keeping the door open for more support, more Backers, and more success post-campaign.

The announcement is good news for creators and their supporters, providing a way for individuals to continue helping their favorite projects.

Streaming Business Progress Amid Criticism

Disney’s streaming unit reported a loss of $18 million in the March quarter, a substantial improvement from the $659 million loss in the same quarter a year earlier. CEO Bob Iger emphasized the company’s challenges in reaching streaming profitability despite this progress.

“Our strong performance in Q2 demonstrates we are delivering on our strategic priorities while building for the future,” Iger said during an earnings call. “Overall, this was another impressive quarter for us, with adjusted earnings per share up 30% compared to the prior year.”

Iger remains confident in Disney’s ability to achieve profitability in its streaming business by the end of the fiscal year. He reiterated that this achievement won’t follow a strictly linear path, noting that “we are anticipating a softer third quarter due in large part to the seasonality of our India sports offerings, but we fully expect streaming to be a growth driver for the company in the future.”

Disney+, the company’s flagship streaming service, added over six million subscribers in the March quarter, driven by the popular series Bluey and movies like Wish. However, the overall streaming portfolio, which includes Disney+, ESPN+, and a majority stake in Hulu, saw total subscribers rise modestly to 153.6 million from 149.6 million in December.

Disney is also working to increase and deepen customer engagement with its streaming offerings by limiting password sharing, improving its recommendation engine, and integrating new content tiles. Iger emphasized the importance of these initiatives, particularly the addition of Hulu and ESPN tiles to Disney+.

“In March, we successfully launched Hulu on Disney+, bringing extensive general entertainment content to the platform for bundle subscribers,” he explained. “And by the end of this calendar year, we will add an ESPN tile to Disney+, giving all U.S. subscribers access to select live games and studio programming within the Disney+ app.”

To curb improper password sharing, Disney will begin cracking down on unauthorized account sharing for Disney+ next month in select markets, with a global rollout planned for September.

“Obviously, we’re heartened by the results Netflix has delivered in cracking down on password sharing,” Iger noted. “We believe that it will be one of the contributors to growth.”

Despite making progress toward profitability, Disney’s streaming businesses face continued scrutiny. The company’s earnings guidance raised adjusted earnings per share growth to 25%, just shy of Wall Street’s expectation of 25.3%. Critics like Jeremy Hambly from The Quartering highlight the losses, calling Disney’s approach “woke” and attributing the financial issues to the company’s content choices.

“Disney has now lost $20 billion in market cap. Get woke, go broke. That’s right, Disney,” Hambly said.

However, CFO Hugh Johnston struck a more positive note, pointing to Disney’s long-term strategy.

“We’ve got a lot of levers that give us strong reasons to believe that there’s good growth in front of us,” Johnston said on the earnings call. He cited the crackdown on password sharing and Disney’s growing streaming portfolio as key components of the company’s growth strategy.

“We continue to expect our combined streaming businesses to be profitable in the fourth quarter and expect further improvements in profitability in fiscal 2025,” he added.

Is Disney Awake on Woke?

Disney has long been regarded as a cultural touchstone, influencing generations with its family-friendly entertainment and theme park experiences. In recent years, however, the company has faced mounting criticism over its perceived alignment with progressive ideologies and inclusivity initiatives. This critique, often summarized with the phrase “go woke, go broke,” has been amplified by political commentators and has ignited intense debates over Disney’s creative direction and corporate values.

Box Office Backlash

Critics argue that Disney’s pursuit of progressive themes has led to a string of box office disappointments. Films like Lightyear and Strange World, criticized for their overt messaging, failed to meet expectations, contributing to Disney’s nearly $1 billion in film losses in 2023 alone. Furthermore, Indiana Jones and the Dial of Destiny and The Marvels received mixed reviews and underperformed financially, signaling potential challenges in appealing to a broader audience.

The YouTube channel TheQuartering, known for criticizing Disney’s “woke” agenda, recently highlighted the company’s market cap loss of nearly $20 billion, arguing that audiences have grown weary of being “preached to.” The host noted, “Disney has now lost $20 billion in market cap. Holy smokes. Can I get a ‘get woke, go broke?’”

Disney’s Response to Critics

Despite the criticism, Disney remains resolute in its commitment to diverse and inclusive storytelling. CEO Bob Iger has consistently emphasized the importance of reflecting global audiences and fostering inclusivity in Disney’s creative output.

“We are committed to telling stories that resonate with diverse audiences around the world,” Iger said. “Our mission is to deliver content that not only entertains but also inspires and reflects the rich diversity of our global audience.”

In response to recent box office struggles, Disney has reassessed its creative strategy, reducing the output of underperforming franchises while emphasizing quality over quantity. The company announced plans to scale back Marvel releases to two or three films per year while reducing the number of Marvel TV series on Disney+.

Content and Profitability

Disney’s effort to cater to progressive audiences has also impacted its streaming services. While Disney+ achieved profitability for the first time in the March quarter, it fell short of analyst expectations, partly due to password sharing and increased competition.

“We have a responsibility to balance creative expression with profitability,” Iger noted. “While we believe in inclusivity, we are also focused on delivering content that attracts and retains a diverse subscriber base.”

Navigating Cultural Sensitivities

The company’s progressive stance has affected its creative output and led to high-profile conflicts with conservative politicians. Disney’s opposition to Florida’s Parental Rights in Education bill, known as the “Don’t Say Gay” law, resulted in a protracted legal battle with Governor Ron DeSantis.

“Disney’s fight with DeSantis has only further polarized the perception of the company,” said political analyst Alex Harris. “While it won the support of progressive audiences, it alienated some traditional Disney fans.”

Balancing Act

Disney’s quest to balance inclusivity with financial success is a complex challenge that continues to unfold. Critics argue that Disney has overcorrected in its pursuit of progressive themes, while supporters maintain that inclusive storytelling is essential for the company’s future.

“There’s a fine line between staying relevant and alienating core audiences,” media analyst Jessica Ehrlich remarked. “Disney must navigate this cultural divide carefully, ensuring that its creative direction appeals to a broad spectrum of viewers.”

Looking Forward

As Disney moves forward, the company aims to strike a balance between its progressive values and commercial success. By reducing output, focusing on quality storytelling, and carefully navigating cultural sensitivities, Disney hopes to redefine its creative direction while staying true to its inclusive ethos.

“We remain focused on delivering exceptional stories that connect with audiences worldwide,” Iger affirmed. “Inclusivity and profitability are not mutually exclusive, and we believe we can achieve both.”

While critics and supporters remain divided over Disney’s approach, one thing is clear: industry peers and audiences alike will watch closely as the company journeys toward a more inclusive and profitable future.

ESPN and Sports Segment

While Disney’s streaming businesses were a focal point, the sports segment also garnered significant attention during the earnings call, given its critical role in its overall growth strategy. ESPN and the broader sports segment were particularly affected by rising programming and production costs due to the timing of College Football Playoffs. Operating income for sports fell by 2% to $778 million despite a 2% increase in revenue to $4.31 billion.

During the call, CEO Bob Iger emphasized the importance of live sports in attracting and engaging audiences, highlighting ESPN’s role in driving growth and viewership.

“I see sports continuing to shine in a world with considerably more choice. Live matters,” Iger said. “Sports generally are driving higher engagement with streaming subscribers, and recent ratings wins across a variety of sports have proven this.”

ESPN saw a particularly strong April, achieving its highest primetime viewership for that month on record. The NCAA Women’s Final Four set a new viewership record, with the championship game between Iowa and South Carolina becoming ESPN’s most-watched college basketball game ever, regardless of gender. Furthermore, the NFL postseason broke viewership records, and Monday Night Football had its most-watched season since 2000.

Iger also underscored the strategic importance of sports in Disney’s direct-to-consumer strategy, noting that ESPN will be adding a tile on Disney+ before the end of the year. This will give all U.S. subscribers access to select live games and studio programming within the Disney+ app.

“We see this as a first step to bringing ESPN to Disney+ viewers, as we ready the launch of our enhanced standalone ESPN streaming service in the fall of 2025,” Iger noted.

Given the growing value of sports content, ESPN is also engaged in high-stakes negotiations with the NBA for a new rights package. Iger expressed optimism about securing a long-term deal that aligns with the company’s best interests.

“We’re confident or optimistic we’re going to end up with an NBA deal that will be long-term in our best interest and the best interest of our subscribers,” he said.

However, challenges remain, particularly in ESPN’s traditional linear business, which suffers from declining viewership and lower affiliate revenue due to cord-cutting.

Hugh Johnston, Disney’s CFO, acknowledged these challenges but emphasized that the company is well-positioned to navigate them due to its extensive sports rights portfolio.

“First of all, we’ve locked up long-term deals with significant sports organizations, including the college football championships, all the NCAA championships, and the NFL,” Johnston said. “We’re also confident that our strategic partnership with Fox and Warner Bros. Discovery on a new sports-streaming service will drive growth.”

In addition to these partnerships, Disney’s sports business includes ESPN+ and a majority stake in Hulu, home to popular sports-themed shows like Shōgun and The Bear. Iger emphasized leveraging the company’s entire portfolio to maximize this content’s potential.

“Our linear channels are deeply embedded in our direct-to-consumer strategy, as they continue to deliver high-quality content that reaches demographics not captured on streaming alone,” he said.

With these strategic moves, Disney aims to maintain its leadership in the sports entertainment segment and ensure ESPN remains a key driver of growth and profitability.

Star India and the Impact of Cricket Rights

Disney’s global sports ambitions took a hit in the most recent quarter due to significant challenges its Star India subsidiary faced and the loss of critical cricket broadcasting rights. The company took a $2 billion impairment charge related to its Star India operations and linear television networks, swinging Disney to a loss of $20 million for the quarter, compared to a net income of $1.27 billion in the same period last year.

Star India, once considered a crown jewel in Disney’s 2019 acquisition of 21st Century Fox, encountered significant challenges after losing key cricket rights. These rights had previously attracted a substantial audience to Hotstar’s streaming platform. With the loss of the Board of Control for Cricket in India (BCCI) rights, Disney+ Hotstar saw many customer cancellations. The impairment charge reflects that the value of Star India is now approximately $2 billion less than its initial purchase price.

Disney CFO Hugh Johnston explained the impact of losing cricket rights: “The impairment indicates that the India business is today valued at about $2 billion less than when Disney first purchased it. Losing key cricket rights undoubtedly affected subscriber growth for Disney+ Hotstar.”

Despite these challenges, Johnston noted that Disney remains committed to the Indian market and is working to stabilize Star India’s business by enhancing its programming mix. The company is also exploring strategic partnerships to revitalize growth.

“We’re focused on diversifying the content portfolio on Disney+ Hotstar to offer a broader mix of sports, entertainment, and local programming,” Johnston said. “We’ve already seen a positive response to our new programming initiatives and are confident that we can regain traction.”

Moreover, Bob Iger highlighted the company’s intent to remain competitive in India’s burgeoning streaming market by improving customer engagement and leveraging Disney’s rich global content library.

“We have prioritized efforts to deepen customer engagement, including limiting password sharing and improving the recommendation engine on Disney+ Hotstar,” Iger stated. “We’re also integrating a new Hulu tile and planning to add an ESPN tile to Disney+ before the end of the year.”

However, the company anticipates further losses in the third quarter for its entertainment direct-to-consumer business due to the cost of the International Cricket Council (ICC) cricket rights. The ICC rights are crucial for maintaining Star India’s competitive edge, and Disney is banking on these rights to revitalize Hotstar’s subscription growth.

“We remain optimistic about the potential of Star India and Disney+ Hotstar,” Iger emphasized. “Sports, particularly cricket, will continue to be a strategic focus for us in the region, and we’re taking steps to ensure we’re well-positioned for future growth.”

In addition to cricket rights, the company also focuses on improving profitability through cost rationalization and strategic partnerships with local players.

“We’re committed to improving operational efficiency at Star India while exploring new partnerships to enhance our content offerings,” Johnston added. “Ultimately, we believe these efforts will help us achieve sustainable profitability in this market.”

Despite recent setbacks, Disney remains determined to maintain a strong presence in India, recognizing the immense potential of its fast-growing streaming audience.

Theme Parks and the Magic Kingdom’s Post-COVID Magic

Disney’s theme parks, a cornerstone of the company’s profitability, remain a vital part of its business. Despite revenue increasing 10% to $8.39 billion for the March quarter and operating income rising 12% to $2.29 billion, there are growing concerns over the sustainability of this growth. Bob Iger acknowledged the parks segment’s challenges in maintaining post-COVID demand while navigating rising costs.

“We’re seeing some evidence of a global moderation from peak post-COVID travel, and this is impacting demand at our parks,” Iger stated during the recent earnings call. “However, we’re still confident in the long-term growth potential of our parks and experiences business.”

The Magic Kingdom and its broader experiences segment are fundamental to Disney’s profitability, but the company noted that operating income for the segment is expected to be flat in the June quarter, a significant deviation from analyst expectations of 12% year-over-year growth. Factors influencing this include pre-opening expenses for the new Disney Treasure and Disney Adventure cruise ships and higher labor expenses due to inflation.

“Rising wage expenses and inflation continue to weigh on near-term profitability,” said Disney CFO Hugh Johnston. “However, we’re confident that demand remains healthy, and we’re already seeing bookings showing strong growth for the remainder of the year.”

Despite these headwinds, Disney is optimistic about its strategic investments in the experiences segment. The company recently launched its Disneyland Forward initiative to expand the Disneyland Resort in California with new attractions and immersive experiences. Meanwhile, Disney Cruise Line is gearing up to introduce Lookout Cay, a new private island destination, along with two new cruise ships.

“Our investments in the Disneyland Forward initiative, the expansion of Disney Cruise Line, and our long-term plans for Walt Disney World will turbocharge growth in this segment,” Iger emphasized. “We’re working to bring new and compelling stories to life across all our parks and experiences, ensuring that guests have magical experiences that will keep them coming back.”

Additionally, Disney remains focused on optimizing guest experiences through its Genie+ and Lightning Lane services, which provide guests with more personalized itineraries and shorter wait times for popular attractions. The company is also investing heavily in technology to enhance the customer journey, from mobile ordering at restaurants to virtual queues at attractions.

“Enhancing the guest experience is at the core of everything we do,” Iger remarked. “Our technology investments and strategic pricing adjustments are designed to ensure that every guest has a magical and memorable visit, regardless of the park they visit.”

Disney has a slate of highly anticipated theme park expansions and projects that will help maintain its leadership position in the global theme park industry. The planned opening of new attractions tied to popular franchises like “Avatar” and “Indiana Jones” is expected to draw significant interest.

“Avatar, Moana, and Indiana Jones are just a few of the stories we’re bringing to life in our parks,” Iger noted. “These projects will continue to set Disney apart and keep the magic alive for millions of guests worldwide.”

However, challenges remain as the company grapples with inflationary pressures, evolving consumer preferences, and growing competition from rival Universal Studios, which plans to open a new theme park in Orlando next year.

“Universal’s expansion highlights the increasing competition in the industry,” Johnston stated. “But we’re confident that our unmatched storytelling, innovative technology, and focus on quality will ensure that Disney remains the premier destination for families worldwide.”

Despite the uncertainties, Disney’s long-term investment in its parks, cruises, and resort experiences positions the company to capture continued growth in the global travel and leisure industry, which is still recovering from the effects of the pandemic.

Cost-Cutting and Content Strategy

Amid the challenges in streaming and theme parks, Disney has been actively pursuing cost-cutting measures to streamline its business and improve profitability. Since returning as CEO, Bob Iger has made significant strides in implementing a leaner organizational structure and focusing on quality over quantity in the company’s content strategy.

“We’re firmly committed to achieving sustainable profitability,” Iger said on the recent earnings call. “Our restructuring efforts and strategic focus on high-quality content have positioned us well for the future.”

Disney recently announced a plan to cut $7.5 billion in annual costs, including reducing its workforce by approximately 7,000 employees. These cost-cutting measures will primarily affect the company’s marketing, administrative, and content production divisions. The aim is to shift resources toward high-impact projects with the greatest profitability potential.

Disney’s CFO Hugh Johnston emphasized these efforts’ significance: “We’ve already achieved considerable progress in our cost-efficiency initiatives. Our new organizational structure and reduced content spend will provide us with greater flexibility to navigate a dynamic market.”

In the content production segment, Disney is reevaluating its slate of projects, particularly at Marvel and Lucasfilm, to focus on fewer high-quality productions. “We’ve been working with the studio to reduce output and focus more on quality, particularly within our Marvel projects,” Iger said. “Reducing the number of films and series allows us to concentrate on developing exceptional stories that resonate with audiences.”

This shift was evident in Disney’s decision to limit its Marvel Cinematic Universe releases to two or three films per year and reduce the number of Marvel series on Disney+ from four to two. Iger explained that the company wants to reinvigorate the Marvel brand by returning to a model that prioritizes event-level releases, like “Avengers: Secret Wars” and “Deadpool & Wolverine.”

“At Marvel, we are reimagining our approach to storytelling by ensuring that every film and series we produce is unique and impactful,” Iger noted. “With reduced output, we can dedicate more time and resources to creating compelling, high-quality content.”

Additionally, Disney is banking on the power of its legacy franchises, such as Star Wars, Indiana Jones, and Avatar, to drive both box office and streaming revenues. With new projects in development for each brand, the company aims to captivate audiences across all age groups.

“Kingdom of the Planet of the Apes” is set for release this weekend, while Pixar’s “Inside Out 2” and Marvel’s “Deadpool & Wolverine” are slated for later this year. Iger remains optimistic about the company’s upcoming slate: “Our studios continue to deliver top-tier content that resonates with audiences globally.”

Meanwhile, Disney is exploring potential licensing opportunities to generate additional revenue from its vast content library. While exclusive streaming rights remain crucial to driving subscriber growth on Disney+, Hulu, and ESPN+, Iger noted the strategic benefits of third-party licensing.

“We’re being more expansive in our thinking about content licensing,” Iger said. “We recognize that certain opportunities can amplify the value of our IP and create new revenue streams.”

However, the company remains committed to maintaining the core of its marquee content on its streaming platforms, leveraging the power of its library to bolster engagement and retain subscribers.

“Ultimately, our goal is to strike the right balance between licensing and exclusivity, ensuring that our streaming platforms continue to offer a unique and compelling experience for our customers,” Iger emphasized.

By optimizing its cost structure and refining its content strategy, Disney aims to navigate the turbulent media landscape and return to sustainable growth across all business segments.

Looking Forward

As Disney embarks on its journey toward sustainable profitability, it faces several challenges and opportunities that will define its future. CEO Bob Iger remains optimistic about the path ahead and has outlined a strategic plan that leverages Disney’s extensive content library, strong brand portfolio, and innovative technological capabilities.

Streaming Business Profitability In the streaming segment, Disney remains focused on achieving profitability by the end of fiscal 2024. Iger emphasized the importance of subscriber growth and retention through high-quality content, a revamped user interface, and innovative technological solutions like password-sharing crackdowns.

“We’re on track to deliver profitability in our combined streaming business in the final quarter of this fiscal year,” Iger stated. “By enhancing the Disney+ experience with Hulu and ESPN tiles and cracking down on password sharing, we expect to see a significant boost in engagement and revenue.”

Disney also prioritizes advertising revenue by expanding its ad-supported tier across streaming platforms. CFO Hugh Johnston noted, “Our ad tier subscriber growth is encouraging, and we continue to invest in improving our recommendation engine and direct-to-consumer marketing efforts.”

ESPN’s Transition to Digital With ESPN preparing to launch its standalone streaming service in 2025, the company is paving the way for a new era of sports consumption. “ESPN will continue to be a premier destination for sports fans worldwide,” Iger said. “By offering a seamless blend of linear and digital programming, we believe the ESPN flagship streaming service will redefine sports viewing.”

The ESPN tile on Disney+ is expected to engage current subscribers and offer a glimpse into ESPN’s broader sports ecosystem, driving further interest in the standalone service. “We’re confident that the ESPN streaming service will deliver a compelling experience, building on the success of our existing ESPN+ platform,” Johnston added.

Reinvigorating Content Strategies In the coming years, Disney’s studios will focus on revitalizing their major franchises while exploring new and original stories that captivate audiences. The balance between sequels and fresh IP will maintain relevance across age groups and drive box office and streaming revenues.

“We are reducing output to prioritize quality over quantity,” Iger explained. “Whether it’s Marvel, Star Wars, or Pixar, our goal is to deliver memorable stories that resonate deeply with our audience.”

Disney’s strategic decision to limit Marvel releases to two or three films per year while reducing the number of Marvel series on Disney+ reflects this commitment to quality storytelling.

Expanding International Presence Despite recent challenges in India, Disney is determined to expand its international footprint. The new partnership with Reliance Industries and Viacom18 is expected to help Disney regain lost ground and provide a framework for future international collaborations.

“Our partnership in India will enable us to explore new markets while ensuring profitability and growth for Disney+ Hotstar,” Johnston said.

Reviving the Magic at Theme Parks While the theme park segment faced setbacks due to COVID-19 and economic challenges, Disney remains confident in the resilience of its experiences business. With new attractions and immersive experiences on the horizon, the parks division is poised for continued growth.

“Theme parks are a cornerstone of our business,” Iger noted. “We’re excited about the future with new attractions like the Disneyland Forward initiative and the Disney Treasure cruise ship.”

Despite moderating post-COVID demand, Disney plans to invest $60 billion over the next decade in parks, cruise lines, and resorts. “These investments will enhance our guests’ experiences and deliver long-term growth,” Johnston said.

Sustained Financial Stability With a clear strategic vision and continued investment in quality content, technology, and international expansion, Disney aims to achieve sustained financial stability. The company is also prioritizing shareholder returns through stock buybacks and dividend payouts.

“We’re committed to delivering long-term value for our shareholders,” Johnston emphasized. “Our cost-efficiency initiatives, combined with strategic investments and content quality, will pave the way for robust earnings growth.”

As Disney navigates the dynamic media landscape, it remains a cultural and entertainment powerhouse committed to delivering exceptional experiences for audiences worldwide.

Profitability Over Popularity

Gone are the days when Silicon Valley’s darling, Netflix, was merely a platform gaining subscribers at the expense of profitability. Today, it is a beacon of robust financial health, directing its growth straight to the bottom line. “This is where it used to be a company that never made money; now it’s a company that’s just spitting off profits,” remarked Mark Douglas, President and CEO of MNTN, during a discussion with Paul Sweeney and Alix Steel on Bloomberg Radio. This pivotal shift in investor focus from subscriber growth to substantive financial returns reshapes how the market views the streaming giant.

Strategic Shifts: Cracking Down on Password Sharing and Ad-Supported Tiers

Netflix’s strategic pivots include rigorous measures against password sharing and the introduction of ad-supported subscription tiers. The crackdown on password sharing, a seemingly low-hanging fruit in policy enforcement, promises significant returns. “It’s highly leveraged—just give a few engineers in a room, and they make it harder to share passwords, which creates a huge amount of growth,” Douglas noted on the potential of these initiatives to legitimately bolster subscriber numbers.

Although ad sales are progressing slower than anticipated, the ad-supported model presents substantial untapped potential. This model offers discounted memberships and opens up a new revenue stream through advertisements, which could be pivotal as the platform seeks to balance content costs with revenue inflows.

Financial Outlook and Industry Comparison

As of the 2024 fiscal outlook, Netflix projects nearly $40 billion in revenue with EBIT margins around 25-26% and a promising free cash flow of $6.3 billion. Such figures reflect a solid business model and set a high benchmark within the streaming sector, which sees traditional media companies floundering, except Disney.

The key to Netflix’s success lies in its ability to scale its subscriber base effectively. “Every incremental user is incremental profit and cash flow,” Douglas stated. He suggests that Netflix’s subscriber base could grow from a quarter billion to half a billion worldwide, a testament to its scalable and profitable model.

Consolidation: The Future of Streaming?

The streaming industry, characterized by various platforms, faces a potential consolidation wave. Unlike Netflix, which has become a default starting point for viewers, much like the cable guide of yesteryears, other platforms lack distinctive identities or sufficient content libraries to stand alone. “You go to Netflix because they have everything…Why do you go to CBS?” Douglas questioned, predicting significant industry consolidation where major players might merge to pool content libraries and compete more effectively with Netflix.

Looking Ahead

As Netflix continues to navigate the challenges and opportunities of the streaming market, its strategies around ad integration, password-sharing policies, and content curation will be critical. The company’s transition from focusing primarily on subscriber growth to maximizing profit margins and cash flow marks a mature, more sustainable phase in its business trajectory.

While Netflix’s road ahead involves navigating competitive pressures and operational execution, its current trajectory suggests it has the potential to remain a leader in the streaming space, setting benchmarks not just in subscriber numbers but also in profitability and strategic innovation.

Reflecting on Disney’s entry into the streaming arena with the launch of Disney+, Iger recalled the early challenges and triumphs of the platform. “In just over four years, we find ourselves second to Netflix in terms of global subscribers for a pure streaming business,” remarked Iger, highlighting the rapid ascent of Disney+ in capturing the hearts and screens of audiences worldwide.

However, Iger acknowledged the initial financial setbacks that Disney’s streaming venture incurred, citing losses of approximately $4 billion annually. Determined to chart a path to profitability, Disney embarked on a strategic overhaul, focusing on cost reduction and revenue optimization. “The goal was, first, let’s reduce those losses. As we’ve said, we will be profitable in our fiscal fourth quarter this year,” Iger explained, underscoring the company’s commitment to achieving sustainable growth.

Looking ahead, Iger outlined Disney’s vision to transform its streaming business into a growth engine, emphasizing user engagement and content innovation. “We have to increase engagement. We need the technological tools to lower churn and create more stickiness,” Iger emphasized, highlighting the importance of leveraging data-driven insights and personalized recommendations to enhance the streaming experience.

As Disney navigates the complexities of the streaming landscape, questions arise about the competitive dynamics and the company’s position vis-à-vis industry peers. While acknowledging the formidable presence of competitors like Netflix, Apple, and Amazon, Iger expressed confidence in Disney’s unique strengths and capabilities. “We know what you need to be successful in streaming, and not everybody has that,” he remarked, reaffirming Disney’s commitment to delivering compelling content and unparalleled user experiences.

Disney’s streaming strategy is a testament to its adaptability and foresight in a rapidly evolving digital landscape. As the company continues to innovate and expand its streaming footprint, one thing remains clear: the battle for streaming supremacy is far from over, and Disney is poised to lead the charge in reshaping the future of entertainment.

Top Ten Things Needed to Make Disney+ Profitable

1. User Engagement: Increasing user engagement through compelling content and personalized recommendations is crucial for retaining subscribers and maximizing revenue.
2. Cost Reduction: Implementing cost-cutting measures to minimize operational expenses and improve profit margins.
3. Content Expansion: Continuously expanding the library of exclusive and original content to attract new subscribers and retain existing ones.
4. International Expansion: Expanding Disney+ into new global markets to tap into a broader subscriber base and drive revenue growth.
5. Technology Investments: Investing in technological infrastructure to enhance streaming quality, user experience, and platform stability.
6. Churn Reduction: Implementing strategies to reduce subscriber churn, such as targeted promotions, loyalty programs, and improved customer service.
7. Advertising Revenue: Exploring opportunities to generate additional revenue through targeted advertising on the platform while balancing user experience and ad load.
8. Partnerships and Licensing Deals: Forming strategic partnerships and licensing agreements to acquire premium content and expand the platform’s offerings.
9. Monetization of Original Content: Disney’s vast intellectual property library will be leveraged to create merchandise, theme park attractions, and other revenue streams tied to original content.
10. Data Monetization: involves leveraging user data to inform content decisions, target advertising, and drive personalized recommendations, thereby increasing engagement and revenue opportunities.

By focusing on these key areas, Disney can position Disney+ for long-term profitability and success in the highly competitive streaming market.

However, with the rise in popularity of audiobooks, Spotify found itself paying book publishers without collecting revenue from users. Consequently, the company has decided to adjust its pricing structure, with users now facing an additional fee of one to two dollars per month, depending on their subscription plan, to continue accessing audiobooks.

The news of Spotify’s move has elicited mixed reactions. Investors’ enthusiasm was reflected in a 6% surge in the company’s shares. This positive response suggests confidence in Spotify’s trajectory toward profitability. However, consumers may view the decision less favorably, perceiving it as another expense in an already crowded subscription landscape.

Introducing a basic plan offering only music and podcasts underscores Spotify’s effort to provide users with more choices. Yet, the question remains for many: What additional value does the new pricing structure offer? With audiobooks previously available for free, subscribers may hesitate to pay extra for content that was once included.

Meanwhile, in entertainment, Ari Emanuel’s decision to take his company, Endeavor, private reflects a strategic maneuver to gain more flexibility. Emanuel’s frustration with the market’s valuation of Endeavor’s diverse assets, including talent agencies and sports betting information, prompted the move to go private. The $25 billion enterprise value assigned by Silverlake marks the largest private equity takeover of a public company in over a decade, signifying significant confidence in Endeavor’s potential.

The transition to a private entity may provide Endeavor with the latitude to reevaluate its assets and potentially divest certain divisions without the scrutiny of public investors. While this move may reduce visibility into Hollywood’s operations, particularly about Endeavor’s activities, it promises to offer Emanuel greater autonomy to navigate the evolving entertainment landscape.

As Spotify and Endeavor embark on these strategic shifts, the entertainment industry braces for the impact of these transformative decisions. With Spotify redefining its pricing model and Endeavor charting a new course as a private entity, the dynamics of the entertainment landscape are poised for change, setting the stage for a future shaped by innovation and adaptability.

As the discussion unfolded, Alex Weprin emphasized the unparalleled influence of Taylor Swift in the entertainment industry, characterizing her as a cultural icon with a devoted global fanbase. The acquisition of the “Eras Tour” movie, reportedly secured for a staggering $75 million, underscores Disney’s strategic move to leverage Swift’s star power in driving new subscribers to its platform.

The “Eras Tour” movie, while not a live event in the traditional sense, promises an immersive experience that aims to transport viewers into Swift’s electrifying concert performances. Weprin noted that this approach aligns with the growing trend towards live and live-ish content in streaming, where platforms seek to engage audiences with captivating experiences that evoke the excitement of being present at the event itself.

This shift towards event programming reflects a broader evolution in the streaming landscape, where platforms increasingly invest in high-profile content to differentiate themselves and attract subscribers. From live sports to concert films, streaming services like Disney Plus, Netflix, and Peacock recognize the value of offering exclusive, must-see events to drive subscriber growth and retention.

Looking ahead, Weprin emphasized the importance of striking a balance between content spend and investment in event programming for streaming platforms. With competition reaching a fever pitch, platforms must carefully curate their content offerings to cater to diverse audience preferences while maximizing the impact of their investments in exclusive events.

Taylor Swift’s “Eras Tour” movie presents a significant opportunity for Disney Plus to capitalize on the immense popularity of one of the biggest names in music and reignite interest in its platform. As the streaming wars continue to unfold, the success of event programming like this will undoubtedly play a pivotal role in shaping the future of the industry and determining the winners in the fiercely competitive streaming landscape.

Andrey Norkin from Netflix, Hassene Tmar from Meta, Boban Kasalovic from United Cloud, and Tim Siglin from Help Me Stream engaged in a candid conversation, sharing their insights and experiences with codec migration. The discussion delved into the motivations behind changing codecs, the complexities of catering to legacy users, and the implications for content delivery platforms.

“For us at Netflix, the decision to migrate to a new codec is driven by our commitment to delivering high-quality content and enhancing the viewing experience for our members. Technological advancements in codecs enable us to achieve better compression and improved visual quality, which are crucial for meeting the evolving demands of our global audience,” stated Andrey Norkin, representing Netflix.

Hassene Tmar, speaking on behalf of Meta, highlighted the role of new codecs in driving innovation and user engagement. “At Meta, we see new codecs as enablers of immersive experiences and innovative features. By leveraging advanced codec technologies, we aim to enhance user engagement and retention, ultimately delivering value to our community of users,” Tmar remarked.

However, transitioning to a new codec presents various challenges, particularly managing legacy infrastructure and ensuring compatibility with existing devices and platforms. Boban Kasalovic, representing United Cloud, emphasized the importance of strategic planning and testing in minimizing disruptions for end users. “Managing legacy infrastructure and ensuring seamless compatibility with existing devices are critical challenges in codec migration. At United Cloud, we prioritize careful planning and testing to mitigate potential disruptions for our users,” Kasalovic explained.

Tim Siglin from Help Me Stream echoed these sentiments, emphasizing the need to balance quality and efficiency in codec migration. “While new codecs offer improved compression and visual quality, they may require more computational resources. Striking a balance between maximizing quality and optimizing bandwidth usage is essential to accommodating users with varying internet connections,” Siglin stated.

In conclusion, the discussion underscored the complexities and considerations involved in codec migration for streaming platforms. While new codecs offer opportunities for innovation and improvement, they also pose challenges regarding compatibility, resource allocation, and user experience. By leveraging their collective expertise and adopting strategic approaches, companies can navigate these challenges and effectively deliver high-quality content to their audiences.

During an interview on CNBC, Mark Mahaney, Head of Internet Research at Evercore ISI, shared insights into the rationale behind the price target adjustment. Mahaney emphasized the pivotal role of Netflix’s mobile-only subscription plan in driving subscriber growth and enhancing the company’s revenue potential.

Mahaney noted that the mobile-only plan, introduced over the past couple of years, has been instrumental in attracting many new subscribers. With its more affordable price point, the mobile-only offering has resonated particularly well with consumers seeking flexible and accessible access to Netflix’s vast library of content.

The success of the mobile-only strategy goes beyond merely adding new subscribers; it also serves as a catalyst for expanding Netflix’s customer base across diverse demographics. Notably, Mahaney pointed out that approximately 40% of new sign-ups opt for the mobile-centric subscription, highlighting the effectiveness of the lower price tier in broadening Netflix’s market reach.

Furthermore, Mahaney underscored how the mobile-only plan provides Netflix a competitive edge, allowing the company to maintain pricing power even as it explores higher-end subscription options. By offering a more affordable entry point, Netflix can effectively capture market share and solidify its position as a leader in the streaming space.

Despite increasing competition and valuation concerns, Mahaney remains bullish on Netflix’s long-term prospects. He views Netflix as a standout performer amidst a backdrop of industry upheaval, with the company demonstrating resilience and adaptability in navigating evolving market dynamics.

In conclusion, Evercore ISI’s decision to raise Netflix’s price target reflects a positive outlook on the company’s future growth potential. With a focus on innovation and customer-centric strategies such as the mobile-only subscription plan, Netflix continues to differentiate itself in a crowded streaming market, positioning itself for sustained success in the years ahead.

Musk revealed that X is set to release an app that will enable users to watch long-form videos from the platform directly on their smart TVs. This strategic move follows a report by Fortune detailing X’s plans to roll out a TV app for Amazon and Samsung users in the coming week. The app, described as “identical” to YouTube’s TV app, signals Musk’s intention to position X as a direct competitor to the Google-owned video platform.

The announcement follows X’s efforts to revamp its video and audio offerings, which were introduced in October as part of Musk’s vision to make X a “super app” catering to various user needs.

Responding to a user’s post about the upcoming smart TV app, Musk teased the imminent release with a cryptic “Coming soon” message on X. He also highlighted that users can already stream X videos to their TVs using Apple AirPlay.

In a bid to attract content creators and advertisers, X has been actively seeking partnerships and rolling out new features. The platform has struggled to retain advertisers in the wake of controversies since Musk’s ownership group acquired X in 2022.

Last month, X announced plans to allow advertisers to target their ads alongside posts from select premium content creators. This move aims to boost ad revenue and attract high-quality content to the platform.

Despite X’s efforts to bolster its video offerings, the platform continues to face challenges in the highly competitive digital landscape. However, Musk’s ambitious vision and relentless pursuit of innovation suggest that X may yet emerge as a formidable player in the social media and video streaming markets.

As X prepares to launch its smart TV app and expand its presence in the video streaming space, all eyes will be on Musk and his team to see if they can disrupt the status quo and carve out a niche in an industry dominated by giants like YouTube.

One recurring theme in this conversation is the concept of bundling. Whether it’s the traditional cable bundle or a new amalgamation of streaming services, bundling offers both opportunities and challenges for market players.

As industry experts point out, some bundles are more interesting than others. Verizon’s partnership with streaming giants like Netflix and HBO Max offers a glimpse into the future of bundled services. By combining broadband with a suite of streaming options, these companies are creating a more enticing proposition for consumers.

But bundling isn’t just about offering a collection of services at a discounted price. It’s also about simplifying the user experience and reducing the complexity of managing multiple subscriptions. As the number of streaming options continues to grow, consumers are increasingly overwhelmed by choice. Bundling provides a solution to this problem by offering a one-stop shop for all their entertainment needs.

The rise of bundling is closely linked to the emergence of the “Ad Tier” – a new pricing strategy that aims to make streaming services more affordable for consumers. Companies like Canal+ are tapping into a growing demand for bundled services by offering discounted packages that include multiple streaming platforms.

However, the success of bundling depends on more than just price. It also requires a deep understanding of consumer behavior and preferences. Research has shown that consumers are willing to pay more for a smaller bundle of TV networks if it includes only the channels they watch.

In this new era of streaming, the key to success lies in finding the right balance between content, price, and convenience. Companies that can offer compelling bundles that meet the diverse needs of today’s consumers will emerge as the winners in the streaming wars.

As the battle for subscribers rages on, one thing is clear: the future of streaming is bundled. And for companies that can navigate this landscape effectively, the rewards are boundless.

Harley Finkelstein, COO of Shopify, discusses how COVID has dramatically sped up the timeline for commerce moving online and has also moved Shopify closer to its goal of becoming the world’s first retail operating system:

Shopify Evolving Into World’s First Retail Operating System

Most people assume that Shopify is an ecommerce provider. We have more than a million stores on Shopify. If you were to aggregate our stores in the US we’d be the second-largest online retailer in America. Of course, we’re not a retailer but we’re a platform. But we now have these great economies of scale that we’re using to level the playing field for entrepreneurs and small businesses. That being said, what really Shopify is evolving into is the world’s first retail operating system. 

What we’re trying to figure out is what do brands and entrepreneurs and retailers need, not just now but in the future? We think the future of retail is retail everywhere. A brand that’s going to be successful in 5, 10 or 15 years from now needs to sell across any platform and across any channel where they have customers. This idea of enabling Shopify merchants to very easily push their products to the Amazon Marketplace or the eBay marketplace or now the Walmart marketplace, that gives them access to a new set of consumers. The idea is that it all feeds back in one centralized back-office, the retail operating system, which is Shopify. 

Then we’ve gone ahead and asked what else can we do for these merchants? Can we do capital? We’ve now given out about a billion dollars worth of cash advances and loans to small businesses. We’re doing fulfillment and we’re doing shipping. We’re increasing the scope and the relationship that we have with the million stores on Shopify. This is allowing them to become category leaders.

COVID Speeds Up The Ecommerce Revolution

From our view, it seems like the commerce world that would have existed in the year 2030 has really been pulled into the year 2020 (as a result of the COVID crisis). We’ve seen ecommerce as a percent of total retail go from 15 percent to 25 percent in the last three months. That’s the same growth rate that we’ve seen over the last 10 years. What really has emerged here is sort of this tale of two retail worlds. On one side you have these resilient retailers that are doing great, they’re pivoting, and they’re expanding their businesses. On the other side, you have these resistant retailers who have not made it. In many ways, it’s probably the most exciting time for retail in a very long time. 

We talk a lot about these direct to consumer brands that are becoming category leaders. The Allbirds and the Gymsharks who started on Shopify when they were very small and have grown to become the incumbents in their industry. Every 25 seconds a brand new entrepreneur makes his or her (products) for sale on Shopify. We talk a lot about those new startups, those new DTC brands. But actually, what we’re also seeing on Shopify are companies like Lindt Chocolate or Heinz ketchup or Chipotle. They are signing up for Shopify and basically from like five days from contract to launch they are completely changing their businesses. 

This resiliency isn’t simply in the hands of just the smallest of brands. Big companies are also beginning to think a lot more about how to stay resilient in this time. They’re moving well beyond ecommerce or thinking about offline commerce now. They’re thinking about how do they sell across social media? How do they sell across different marketplaces? So no, I don’t think it’s too late (to enter ecommerce) but I do think they have to rethink their strategies.

According to Ars Technica, Alphabet’s executives announced the news in the company’s earnings call in late January. YouTube has been working to monetize its user base, even going so far as to crack down on ad-blockers to push people toward its Premium subscription.

At $13.99 a month, or $10.99 for just YouTube Music Premium, 100 million subscribers means the platform is becoming a significant part of Alphabet’s revenue.

Apple is raising its prices for several of its popular services, both for individual and family plans. Below is the pricing changes, courtesy of MacRumors:

• Apple TV+: $6.99 per month → $9.99 per month
• Apple Arcade: $4.99 per month → $6.99 per month
• Apple News+: $9.99 per month → $12.99 per month

Apple One bundles are similarly getting a price bump:

• Individual: $16.95 per month → $19.95 per month
• Family: $22.95 per month → $25.95 per month
• Premier: $32.95 per month → $37.95 per month

Streaming services across the industry have been raising prices, and Apple now joins those companies.

According to TechCrunch, some users are seeing a pop-up message encouraging them to upgrade to a paid plan for as much as 40% off. The message goes on to say the user will be limited to a single notebook and 50 notes on their current free plan.

Evernote owner Bending Spoons confirmed to the outlet that it is experimenting with the option, but that nothing has been finalized. As TechCrunch points out, there is no mention of the free account limitation on the company’s website.

Bending Spoons acquired Evernote in late 2022 and laid off its US and Chile-based employees in mid-2023, consolidating operations in Europe. It’s not surprise the Milan-based company is looking for ways to increase monetization and help recoup its investment.

As automakers rush to adopt new technologies and trends — think electric vehicles, advanced infotainment systems, etc — many are choosing to monetize features that customers have already paid for, charging a subscription to unlock said features. Mercedes Benz plans to charge an additional $1,200 annually for customers to unlock faster performance profiles in the company’s Mercedes EQ electric vehicles. Similarly, BMW planned to charge customers $18 per month to unlock the heated seats their vehicles already came equipped with. Fortunately, the company backtracked on those plans after customer push back.

In an interview with The Verge’s Nilay Patel, Rowan made clear he is taking a more cautious approach, rather than blindly following suit in the automotive subscription madness. When Patel pointed out how much Volvo’s competitors are trying to monetize the inside of the car, Rowan had he following to say:

I don’t buy it, quite frankly. I think there’s maybe a bit of inside revenue if you want to go to the upper levels of certain performance or you want to release X amount of performance in the car in terms of acceleration.

When Patel pressed, asking if Rowan had any intention of following BMW’s approach of trying to charge for heated seats, the CEO likened it to updating an iPhone:

No, because I update my iPhone the whole time. I would be pretty peeved if every time I update my iPhone, they gave me a bill. So—

Instead, Rowan sees the outside of the vehicle — maintenance, tires, insurance, cleaning, etc — as a more viable option for automakers and dealers to generate more revenue. Rowan emphasized the need to provide the customer a tangible benefit, and software should only be delivered via a subscription if it can do the same:

Where I do think there is much more opportunity is in those external services, but it’s really clear, if you want your car cleaned once a week and you subscribe to a car cleaning service, you’re going to come back and say, “Wow, these guys have done a great job. Whatever it was, that was $20, I’m going to double down on that,” or, “I really like the fact that these guys come and change my tires or I get great insurance coverage or whatever.” Those are tangible benefits that I think people say that adds value to the relationship between us and our customers. If there are software subscription choices that does the same thing, we would of course go in that direction.

Rowan’s take on the industry is a refreshing one, and certainly one many subscription-weary customers can get on board with.

Spotted by Android Authority, Snapchat v12.61.0.45 Beta mentions a “Friends & Family Plan.” The outlet was not able to discern any pricing for the new subscription, but its a safe bet it will be higher than existing plans.

There was mention of an annual plan, however, which would seem to indicate the company may plan to offer the subscription at a cheaper price for those who pay for the entire year.

Android Authority also discovered references to a “Plan Owner,” indicating there will be an administration account that has the ability to add additional accounts to the plan.

Meta has been under fire over privacy and data regulations in the EU, for both Facebook and Instagram. The company is making its ad-free subscription service available in an effort to address those issues.

The company announced the plan on its site:

To comply with evolving European regulations, we are introducing a new subscription option in the EU, EEA and Switzerland. In November, we will be offering people who use Facebook or Instagram and reside in these regions the choice to continue using these personalised services for free with ads, or subscribe to stop seeing ads. While people are subscribed, their information will not be used for ads.

People in these countries will be able to subscribe for a fee to use our products without ads. Depending on where you purchase it will cost €9.99/month on the web or €12.99/month on iOS and Android. Regardless of where you purchase, the subscription will apply to all linked Facebook and Instagram accounts in a user’s Accounts Center. As is the case for many online subscriptions, the iOS and Android pricing take into account the fees that Apple and Google charge through respective purchasing policies. Until March 1, 2024, the initial subscription covers all linked accounts in a user’s Accounts Center. However, beginning March 1, 2024, an additional fee of €6/month on the web and €8/month on iOS and Android will apply for each additional account listed in a user’s Account Center.

Unfortunately, there is no such option available for US users.

Amazon says its net sales came in at $143.1 billion, a 13% increase over the year-ago quarter. The company’s operating income came in at $11.2 billion, up from $2.5 billion a year ago. Similarly, net income was $9.9 billion ($0.94 per diluted share), up from $2.9 billion ($0.28 per diluted share) a year ago.

The company’s changes to its fulfillment process, as well as AWS’ performance, were major factors in the company’s results.

“We had a strong third quarter as our cost to serve and speed of delivery in our Stores business took another step forward, our AWS growth continued to stabilize, our Advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” said Andy Jassy, Amazon CEO. “The benefits of moving from a single national fulfillment network in the U.S. to eight distinct regions are exceeding our optimistic expectations, and perhaps most importantly, putting us on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history. The AWS team continues to innovate and deliver at a rapid clip, particularly in generative AI, where the combination of our custom AI chips, Amazon Bedrock being the easiest and most flexible way to build and deploy generative AI applications, and our coding companion (CodeWhisperer) allowing enterprises to have the equivalent of an experienced engineer who understands all of their proprietary code is driving momentum with customers, including adidas, Booking.com, GoDaddy, LexisNexis, Merck, Royal Philips, and United Airlines, all of whom are starting to run generative AI workloads on AWS. Between AWS re:Invent and our 29th holiday shopping season, this is a particularly action-packed time of year at Amazon and we’re excited for what’s to come.”

According to Bloomberg, Comcast has lost 490,000 cable TV subscribers in the third quarter, along with 18,000 broadband customers. While the first figure is better than analysts expected the second figure is significantly worse, as analysts expected the company to add 10,900 subscribers.

“Growth has halted for Comcast — the largest US broadband provider, with 32 million homes,” said Bloomberg Intelligence senior media analyst Geetha Ranganathan. “The company derives 80% of profit from cable, where, even after a pandemic-demand surge, broadband has been hurt by fierce competition and low-move activity among customers.”

Peacock, the streaming service operated by Comcast subsidiary NBCUniversal, was significant bright spot. The service added 4 million paying subscribers in the quarter, bringing its total to 28 million.

X owner Elon Musk teased the likelihood of the platform transitioning to a paid site in mid-September, a revelation that took CEO Linda Yaccarino by surprise.

The company tweeted that it has begun testing Musk’s plan, charging some unverified accounts $1 per year to engage with other users.

Starting today, we’re testing a new program (Not A Bot) in New Zealand and the Philippines. New, unverified accounts will be required to sign up for a $1 annual subscription to be able to post & interact with other posts. Within this test, existing users are not affected.

This new test was developed to bolster our already successful efforts to reduce spam, manipulation of our platform and bot activity, while balancing platform accessibility with the small fee amount. It is not a profit driver.

And so far, subscription options have proven to be the main solution that works at scale.

More details → https://help.twitter.com/en/using-x/not-a-bot

Charging users is a high-stakes gamble, although at $1 per year the platform may succeed in preventing a mass exodus.