In a conference call with analysts, Robert Iger, chairman and CEO of The Walt Disney Company, weighed in on the international rollout of Disney+, including the upcoming debut in India, and noted that global expansion of Hulu is likely to follow beginning in 2021.
Iger cited the November launch of Disney+ as a “high point” of the company’s first quarter. “Thanks in large part to our incredible portfolio of great brands, the outstanding content from our creative engines and a robust technology platform, the launch of Disney+ has been enormously successful, exceeding even our greatest expectations,” he said in a conference call with analysts yesterday. The platform ended the year with 26.5 million paid subs and as of the start of this week had already reached 28.6 million. “Both conversion from free to pay, and churn rates, were better than what we expected,” he said.
The strong takeup has been driven by “the uniqueness of the service, an excellent user interface, and the high quality of our brands and content. In fact, we’re seeing the four-quadrant appeal of our brands reflected in our subscriber numbers.”
Weighing in on the company’s journey so far to launch Disney+, Iger said, “It’s often challenging for a company to pivot in a new strategic direction, particularly when it involves navigating between established and emerging business models. But since we announced our intention to shift our strategy, we’ve made an extraordinary amount of progress. This includes a strategic reorganization of our company, creating a direct-to-consumer and international segment. We believed the new structure would better position our businesses for the future. Now that we’ve completed the reorganization and launched Disney+, I’m more confident than ever in that decision. I’m enormously proud of what we’ve accomplished in a relatively short period of time, and believe we’re now well-positioned to not only withstand the disruptive forces of technology but thrive in today’s increasingly dynamic media environment.”
This March, the international rollout kicks into high gear, beginning in the U.K. and Ireland, France, Germany, Spain, Italy, Switzerland and Austria. Additional markets, including Belgium, the Nordics and Portugal, will follow this summer. Disney+ has a deal with Canal+ in France and Iger said the company is in talks with other potential distribution partners throughout the region. March will also see the debut of Disney+ in India, in time for the cricket Indian Premier League season, through the existing Hotstar platform. “We will be rebranding Hotstar VIP and Premium subscription tiers to Disney+ Hotstar. We see this as a great opportunity to use the proven platform of Hotstar to launch the new Disney+ service in one of the most populous countries and fastest-growing economies in the world.”
Pricing for the India service has not been disclosed. Iger said there will likely be two distinct products: “One will be more premium in nature and include the entire library plus original programming, and the other will be more basic with the library and not the original programming, priced for the market.”
He added, “We’re taking advantage of the presence of Star in the market and the millions of subscribers they also have, the sports tie-in, the user interface and the technology, including the billing, that already exists, to launch a service under very optimal circumstances.”
Launching Disney+ internationally is the current priority, Iger said. “We’re working up a plan to take Hulu internationally. We don’t have specifics, except we do plan to begin rolling Hulu out in 2021, after the Disney+ launch.”
On the content strategy globally, Iger noted, “We have some work to do in terms of local product because there are quotas in certain markets that we have to meet. But the universal appeal of this product is pretty strong.”
A bigger challenge in the international rollout process is broadband infrastructure. “In some markets, there’s lower broadband penetration, so the total available market is not as high as it is in other markets. The Netherlands is very high. South Korea is very high. But there are other markets, India being one, with lower broadband. But there are huge opportunities for us. The Disney name and the family nature of the product will resonate extremely well.”