By John Lustyan | @johnlustyan | 2 min read
Much to Ryan Reynold’s dismay, Disney has held firm on it’s stance to keep R-rated films off the Disney+ platform, funneling adult fare like Deadpool, Logan and others from the Fox and Touchstone library to sister streaming service, Hulu.
Well, just a few days ago rumors of a breaking “SCOOP” began swirling in Disney chatrooms, fan sites and some “entertainment insiders” that Disney is “DEFINITELY” creating an adult gated Disney+ section for R-Rated library and future slated content.
The Digital Bits’ Bill Hunt stated, “Hearing interesting reports from sources in the last couple days that Disney is creating essentially a more adult section of Disney+ that will require pin code access.” He continued, “And that’s where all of the Fox and Touchstone content will go moving forward. Including lots of #4K.”
While we don’t like to spend too much time speculating on unsubstantiated rumors amongst an enthusiastic online Disney fandom (I led social media for Disney’s $1B+ DTC business, so I’m intimately familiar), it is always a good exercise to game out a point of view on likelihood and merit. So here goes some quick thoughts:
- Disney’s Streaming Strategy is Currently Winning: It’s not perfect, but the “divide and conquer” triumvirate of Disney+, ESPN+, Hulu has proven largely successful, blending mixed business models, with specific value propositions to consumer segments, offering clear and non-conflicting(ish) internal programming mandates. While of course, there are some clear programming opportunities to reduce churn for those adult subs that joined the service for Mandalorian-like content, there is no clear cause to disrupt this very newly established go-to-market strategy that Disney will reportedly spend $350M marketing in 2020.
- But, Disney+ Can’t Globally Export a One-Size-Fits-All Strategy: We always see things here in la-la-land through a domestic first lens. And while domestic traction for Disney+ has been absolutely critical (and wildly successful), international expansion has concurrently been road mapped and prioritized. To that end, it is absolutely possible that country by country driven business and consumer insights may call for a different streaming offering and while Hulu is the obvious default home for Disney-owned content, Hulu is currently only offered in the US and Japan. Disney+ meanwhile is widely available across EMEA, AUS, Canada and more. Building 1 new SVOD and expanding globally is hard enough, so it’s hard to imagine splitting focus and resources to dually expand Hulu alongside Disney+. Thus, I do believe this leaves the room for — and likely mandates — alternative product and programming strategies be explored on a market by market basis. As Andy Bird (former Chairman of Walt Disney International) once shared with me, “A one-size-fits all approach doesn’t work. We can’t just export Disney.” He instead noted the need for contouring regional strategies from the bottom up, factoring in everything from technology to disposable income to infrastructure to IP affinity.
- Our Ultimate Take on the R-Rated Rumor? While I do believe it would be irresponsible to not consider alternative market (see Disney+Hotstar in India) and mid to longer term scenarios for Disney+ evolution, I DO NOT believe we will see f-bomb filled films introduced in the near term.