After Nearly a Century, the Entertainment Dynasty Reinvents its Business Model
On Tuesday, November 12, 2019, the Walt Disney Company made a play for the future with the launch of its new streaming service Disney+. Stepping into the ring with streaming juggernauts as Netflix, HBO, and Apple Plus comes with considerable risk, but thanks to a forward-thinking CEO, the company is poised to dominate the market.
|Within the first day of availability, more than 10 million users subscribed to Disney’s streaming platform. Compare that to HBO’s three-year climb to 5 million users even at the height of the popularity of Game of Thrones. In addition, DIS shares surged more than 7% after the launch. Social media was flooded with excited chatter from Marvel fans, princess enthusiasts, cartoon aficionados, and of course Star Wars nerds. With more than 500 movies and 7000 shows for your viewing pleasure, there is plenty to keep users firmly glued to their couch for the foreseeable future.
The launch of Disney+ marks the culmination of a company-wide reinvention that began in 2017 and now serves as a blueprint case study for digital business transformation.
What Does Digital Transformation Look Like?
Jorge Lopez, research VP at Gartner, defines digital transformation as follows,
“It is the process of exploiting digital technologies and supporting capabilities to create a robust new business model.”
This endeavor is indeed a fundamental reimagining of your business’s resources including people, processes, and technologies in order to optimize the business model.
These technologies may include but certainly aren’t limited to
- mobile apps
- social media platforms
- workflow automation
- artificial intelligence integration
- data center services
- cloud migration
- websites, portals, intranets
Every business’s transformation is unique to the business itself and its objectives. That said, the primary force guiding the development of a digital transformation strategy should be consumer behavior. Therefore, in addition to implementing new technologies, you must also meticulously track and analyze user data across platforms and experiences. And all of this must be spearheaded by the CEO. It’s a tall order.
How Did Disney Make it Work?
Intense Focus on the User
The move to the cloud-based streaming formula was undoubtedly spurred by the massive success of Netflix. With titles ranging from classic cartoons to blockbuster superhero franchises, Disney+ not only offers something for everyone, but also curates the app experience based on unique user behavior. The data from the app’s usage can then be used to inform future Disney original programming and marketing efforts overall. Investing in analytics therefore creates a positive feedback cycle of sorts: the more you are able to “know” your user, the more precisely you can tailor their experience and create loyal customers.
Adaptation to User Behavior
In 2017, the Walt Disney Company announced that it would be reinventing its business model to offer their content directly to consumers, which was a significant departure from their traditional television and motion picture work. The rise of Netflix, Hulu, and other streaming services has coincided with a surge in binge content consumption, and the expansive library available on Disney+ meets this consumer demand, maybe even a bit too well.
Cooperation with Compatible Technology Companies
By partnering with Verizon to offer special access and discounts to customers, Disney was able to immediately tap into a large market and broader tech space. This is also a perfect example of the importance of strategic partnering when moving into new arenas. Partners can add instant trust value to your brand as it grows.
Transform Products into Services
Most importantly, Disney’s transition to streaming is a transformation of Disney products into ongoing services. In addition to the implications that this has for expanding revenue streams, it also creates more loyal consumers.
What Does This Mean for the Market?
Disney+ enters a crowded field that includes giants like Amazon and Netflix as well as new entrants like NBCUniversal’s Peacock and HBO Max. All of these services will find it difficult to compete with Apple’s prices, but each one hopes that original programming will give them an edge in the market, as evidenced by the ever-growing budgets for these projects.
What Does This Mean for You?
Disney has proven that investing in a digital transformation pays off. Since the launch of their streaming service, they have seen stock values rise and customer loyalty pour into the social media sphere. Their impressive success was made possible by the efforts of a self-described “digitally woke” executive.
That could be you. The technology is at your fingertips; ready when you are, if only you can harness it for your goals. If you want a partner who is well placed in the industry to give you the tools and resources needed to transform your business, then look no further than Hostlabs.
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