Disney Enters Streaming Space: Can it Disrupt the Disruptor?
| Case Code: BSTR564
Case Length: 16 Pages
Pub Date: 2019
Teaching Note: Available
| Price: Rs.400
Organization: The Walt Disney Company
Industry: Media & Entertainment company
Themes: Digital Business Strategy, New Market Disruption, Strategic Alliances, Competitive Strategy, Mergers & Acquisition
Abstract Case Intro 1 Case Intro 2 Excerpts
This award-winning case is about The Walt Disney Company’s (Disney) attempts to disrupt the streaming space as it ended its exclusive licensing deal with streaming industry leader Netflix in favor of starting its own direct-to-consumer (DTC) streaming services. The first streaming service, focused on sports (ESPN+), was launched in April 2018 and the second, a Disney-branded film and TV streaming offering, was slated to debut in 2019. In order to accelerate its push into the DTC space, Disney acquired media giant 21st Century Fox (Fox) in December 2017 in an all-stock deal of US$71.3 billion. The deal, expected to close by early 2019, would give Disney control of Fox’s film and television assets as well as stakes in video-streaming service Hulu and overseas television-service providers, Sky plc and Star India. Disney planned to use content from Fox to combat disruption in the rapidly changing streaming space, where the competition included strong players such as Netflix and Amazon.
As Disney tried to break into the global streaming market, Robert A. Iger (Iger), Chairman and CEO of Disney, faced a number of challenges. He had the daunting task of building a massive streaming platform while integrating two big content-creation rivals (Disney and Fox) which had drastically different images and corporate cultures. Moreover, as Disney planned to shift its business model by cutting out middlemen and selling its content directly to customers, Iger had to prepare his company to embrace the new business model without diluting its existing model. Can Disney’s streaming platform battle digital disruption and aggressively undercut the disruptor Netflix? How will the Disney Fox merger affect the media and entertainment landscape? Will Disney be able to disrupt the OTT (Over-The-Top) market or is it too late for it to catch up? This case won the Third Prize in the 2019 John Molson MBA Case Writing Competition.
The case is structured to achieve the following teaching objectives:
- Understand the strategies adopted by Disney to establish its presence in the OTT market.
- Understand the rationale behind Disney adopting a direct-to-consumer (DTC) streaming model.
- Analyze the competitive advantage of Disney in the streaming business.
- Understand the rationale behind the Disney and Fox merger and its implications.
- Identify the issues and challenges faced by Disney in its efforts to disrupt the global OTT market and explore strategies that Iger can adopt to overcome these challenges.
Global OTT market
Disney’s move into streaming
Fox in the mouse house
Implications of the merger
Competing with Netflix
Growth Strategy; Freemium Business Model; COVID-19 Pandemic; Competitive Advantage; Differentiation; Core Competence; Video Conferencing; Zoombombing
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