I wonder if assumptions about horizontal vs vertical content hold. Disney put the first episodes of their Ducktales reboot on youtube, and a week later it has... 1.6m views. On youtube? That doesn't pay one hobbyist minimum wage for the month much less a best in class animation studio.
On one hand, yeah, its targeted at kids. They probably aren't savvy at online content discovery. They almost certainly aren't subscribed to the Disney XD Youtube channel when there are Spiderman vs Pregnant Elsa videos to watch.
On the other hand, they put it out for free, to anyone in the US with an Internet connection, and they got 1.6m hits.
I don't think horizontal works as a business strategy. It relies entirely on memetic effects to propagate your content because the advertising budget required to reach an entire demographic to get ubiquity is magnitudes larger than the cost of actually making the thing. There is too much content inundating people - especially children. It makes your success completely random. Did your "meme" scenes go viral? Did your intricately designed quotable character take off? Did you have those, and just get overshadowed by some other meme at the time?
We won't see the consequences for a while. It will be 10 years before the cablecutters who dropped Disney have children at a critical enough mass to dramatically limit the number of young faces in front of non-interactive screens. But when that comes, it will have consequences none of these companies traditionally built on tv viewership are ready for. And I don't even know if they can prepare.
I feel like the only real end-game solution is to cultivate a fanbase, and use them as your revenue stream - much like how music has become today. Artists don't make anything off trying to sell their music anymore, because not being on spotify and pandora is a death sentence to your relevance. You need the audience, even if they aren't paying you anything, to attract fans that want mech you can profit from.
It would be really weird to see Ducktales as a Patreon project that is getting paid by 100k supporters several millions a month, but it seems to me that is the endgame for original creative media in the long run.
I doubt they put up Ducktales content on Youtube expecting hundreds of millions of view and a ton of advertising money. It's more to have the IP consumed and fresh in kids' and parents' minds for when a new Ducktales movie or toy comes out to support the reboot. The reboot is more of an ad for future monetizable products than anything else.
Which is one of the reasons to make free or essentially free content available these days. The flipside is that, when there are free or essentially free distribution channels, there's a lot to be said for making some content freely available rather than making an inconsequential amount of money off it, if it's tied to other things you can monetize more effectively.
That may explain why Disney put so much high-value content on Netflix recently ... and then announced they're going to yank it all to a new & devoted streaming service. Bait viewers to the near-free content, then tell them "it moved over there" where it can be far better monetized.
Yes, they are setting up a sales funnel for all future duck tales content. People should understand that Disney makes a lot of long-term moves like this one.
You are exactly right. If you don't have a kid between the ages of about 3 and 6, I imagine it's possible to underestimate the kinds of quirky (and incredibly effective) advertising that's being cooked up for the little ones.
I agree. Google is the canonical example of one of these horizontally integrated companies, but they're a very unique case. They use their reach to intake massive amounts of data which increases the value of their advertising. It isn't just about having more ads on more screens; its about those screens providing data which allows you to charge more for your ads.
Netflix capitalizes on this a little bit as well, with using viewing trend data to determine what shows to fund next. But I was bearish on Netflix for a long time; to acquire content they have to pay recurring fees to the original producers, which means annual expenses increase as content increases, but ARR only increases when customers increase. Eventually... everyone has Netflix. How do they increase their content library then?
One way is contract value depreciation of the content over time, which happens. Another is selling addon packages; the "cable industry" route. But the real answer is: Original content. In other words, growing the vertical integration of their platform.
And now we see Google really quadrupling-down on efforts which sound more vertical than horizontal; cloud platform and g-suite.
Or even more critically, everyone has seen everything they want to see on Netflix, and Netflix itself cannot produce enough original content fast enough to justify the sub. Especially when they are competing with what is often free and immediately accessible.
I don't have a Netflix sub right now because nothing they make is compelling enough to pay the $10. Sometimes they release a show I want to see, so I sub for a month, watch that, and unsub again. For like a year. But we are only getting more content online over time, not less, and I'm finding way less need to seek out something to waste time watching, especially if I have to pay up front for it.
I think there's enough good stuff on Netflix to last at least a year of watching - you just haven't discovered it.
The issue is discovery - not the amount of stuff.
People lean towards looking for well known stuff on Netflix - that's a mistake.
It's actually much more interesting to discover the gems you wouldn't normally discover, by watching a little bit of what seems like it may be interesting.
The Hollywood model had me in their shackles where I did the exact same thing you described - I'd subscribe for a show/movie I knew I'd want to watch, search for a few well known movies to re-watch and then give up when they weren't there.
The really good stuff is discovering stuff that doesn't have A list celebrities - it's more original (in the good sense of the word) and now that I've put in the little bit of work of trying out shows I have no idea about, it's paid off.
The really good stuff on Netflix that I've really liked:
Flaked, Peaky Blinders, Hell on wheels
Hell on wheels gets no credit anywhere and it's an incredible show, there are many others like it.
Am I taking crazy pills? Are we really wondering how Netflix is going to survive because EVERYONE has subscribed? Isn't that the problem everyone wishes they had?
Also, sub/unsub is not new. Everyone did the same with HBO and they did just fine.
Not necessarily everyone, but saturating their addressable market.
Imagine this simplistic model of Netflix's finances: they pay ABC $1M/year for ShowA. They have 100k customers in year 1 @ $10/mo, so (ignoring operational overhead) they can afford the show.
Year 2, Netflix wants to continue paying for ShowA because they want to grow their catalogue. Let's say the price has dropped to $800k because many shows lose value over time. Netflix adds ShowB for $1M, meaning they are paying ABC $1.8M. They now have to add 80k customers to be able to afford the new show + the old show.
Point being: This is highly simplified, but the rate at which they can add content is bounded, in one way, by the rate at which they add customers. In other words, if they aren't growing their subscriber base, the existing subscribers are just paying for a catalogue of content they've already watched, or Netflix has to start expiring old content in favor of using that revenue on new content. The second path is obviously the better one.
This is a fundamental thing in services like this, which is why no single service will ever be a "complete repository" of every piece of content in the world. Individual services can only be complete repositories of content that the company which manages it owns. Which is exactly why I'm bullish on Disney's new service; Disney has the most powerful content library out there, between all of their properties. This service will do extremely well, likely better than Netflix.
I think you are vastly overrating how much Netflix must pay to have old shows. To many content owners the choice is between not monetizing their IP, or licensing it to Netflix. That's a pretty weak position from which to negotiate price. Also, content is usually licensed in bundles, which is win-win for content owners and Netflix: The content owners get to monetize their low value content (which Netflix would have otherwise declined to pay for), and Netflix gets a lot of content by paying only a little bit more.
Just cancelled as well. I had queue but it was a bunch of "meh, maybe later". I'd sit there for a while searching for stuff to and often just ended up rewatching "The Office" episodes instead.
>Or even more critically, everyone has seen everything they want to see on Netflix, and Netflix itself cannot produce enough original content fast enough to justify the sub. Especially when they are competing with what is often free and immediately accessible.
What difficulty exactly would they have to produce "original content fast enough"?
Content is produced by independent teams. It's not like one show is holding others back.
I believe the question is posed in the world in which all the premium producers of content decide to run their own services rather than let Netflix aggregate it.
Personally I expect that after a period of everyone trying to run their own service, quite a lot of them are going to fail and discover that letting Netflix have its competitive advantage in streaming while you focus on content production may not be such a bad idea. Or there may be several aggregators and an industry-standardized way of shipping their older content out to them all at once. (This has the advantage of keeping any one of them from getting too powerful.) Perhaps some of that competition will come from specific companies realizing they can improve their own offering by letting other companies on board and then... oh... you've built a Netflix competitor, rather than a Disney platform. Go$h, how $hall we deal with failing with such $ucce$$?
I'd still like to peer in on a parallel universe where Netflix had a subscription model but also sells/rents additional premium content. Not because it would necessarily solve all problems, I'd just like to see the differences when the dominant player makes such a fundamental change. Eventually they'd still try to use their position to extract more rent than the content producers would tolerate, but the resulting changes in timing and value proposition would still have interesting effects.
Effectively a lot of these monthly subscription fees are a form of price discrimination. Some will optimize their HBO spend carefully around how little they can pay to watch GoT. Others will just pay their $15/month and watch a handful of shows now and then when they feel like it.
> I feel like the only real end-game solution is to cultivate a fanbase, and use them as your revenue stream - much like how music has become today. Artists don't make anything off trying to sell their music anymore, because not being on spotify and pandora is a death sentence to your relevance. You need the audience, even if they aren't paying you anything, to attract fans that want mech you can profit from.
This is more or less what Disney is doing by putting Ducktales on YouTube for free.
Completely agree. I feel like I'm in some alternate universe... Well, maybe being in Florida is an alternate universe in this case. Disney is the king of merch upsells. This is the same company that gets tens of thousands of visitors a day to actual physical theme parks. Most companies would be happy to get that to their website, which is just one URL away. Disney Jr. has "commercials" showing kids visiting different parks for the first time, and of course having a blast. Toy stores are full of Disney toys, books, movies, games, and even clothes.
> That doesn't pay one hobbyist minimum wage for the month much less a best in class animation studio.
Basically they put up an Ad for a eagerly awaited product with a really large fan base (a generation of parents wanting to give their kids the nostalgia they have)
Really they should be paying Youtube?
The concept of the first in a series is free is a common business concept for many products (like collectors cards, heroin, first month free memberships). It's an old concept except digital.
It's not entirely binary and I think Ben underestimates the power that content creators have in this country. Some content is simply classic, and will have value 30 years from now. Disney is amazing at making it. Disney is also amazing at lobbying Congress, along with other traditional media content providers to entrench their copyrights beyond the pale: https://www.theverge.com/2017/4/3/15161522/mpaa-riaa-copyrig...
Netflix has been forced to create it's own content because old media wants to charge Reed an arm and a leg for anything distributed online that they don't have control over. Old media always raises the asking price for anyone who comes to them requesting to redistribute content. They are scared to alienate the cable providers, the advertisers, and of losing even more control of distribution with these new consumer-centric on-demand business models. This is why despite years of hype, Google and Apple haven't gotten far with their TV bundles so far.
I do think the Netflix - Disney love/hate is over-hyped. Both can exist. Disney can keep crafting great stories and Netflix can keep targeting customer groups across the globe with affordable content that scratches their niche itch. Amazon has been more willing to pay the piper, but has also had to resort to in-house content. The great thing about good TV/movie content is it tends to retain value. Good luck to Disney creating as seamless a distribution platform as Netflix though...
I think Viacom is going to be the real loser here, to YouTube and Netflix. Most of their MTV, Comedy Central stuff has no replay value. Music videos in particular have been completely absorbed by YouTube. Meanwhile Netflix is doing great comedy specials. Years of family in-fighting has only further weakened Viacom's position and they are likely to be forced into tiered packaging deals by even their traditional cable and satellite partners.
I have a 2- and 3-year-old. Give me all the Disney things at $10/mo and we're good. I'd prefer they be included in Netflix, but Netflix+Disney and I'm still better off than cable, and hopefully there is some better curated content as a result.
This would totally be worth $10/month to have access to the entire Disney catalog; the entire "Disney Vault", all the content from the 60s, 70s, and 80s; all the Wonderful World of Disney; all the classic Disney movies (the entire catalogs of the likes of Fred MacMurray, Annette Funicello, Tommy Kirk, Keenan Wynn and other contract Disney actors from those eras; movies like The Black Hole, Apple Dumpling Gang, The North Avenue Irregulars and other stuff that, if it's available at all, is only currently findable used on VHS); all the animated Disney movies; all the Mickey Mouse and Donald Duck shorts; all the Mickey Mouse Club episodes, all the tween-centric episodic shows, etc.
This would potentially be worth more than $10/month.
If it's just going to be the popular animated feature-length movies, it's not worth $10/month. And they could still screw this up by not having the entire animated movie catalog available for random streaming, but rather only a subset available at any given time.
Disney has a truly massive archive of quality, family content, much of which hasn't been seen for decades and few people even know about or remember. It would be a shame if it continues to rot in obscurity in their vault.
> And they could still screw this up by not having the entire animated movie catalog available for random streaming, but rather only a subset available at any given time.
That artificial scarcity that Disney practices with physical media won't work with an on-demand service and if they try it will definitely be what kills the service.
It works with physical media because once you own it you can watch it as much as you like. So when they do offer the media, people jump and pay full price for it because they know it's their only chance for a while.
With on-demand people aren't going to stick around in the hopes that a movie they want comes into rotation.
I just went with the family to Disney World, and was actually amazed at how much stuff is based on Song of the South. You see Ariel from "The Little Mermaid", you see Buzz and Woody from "Toy Story", and you hear Zip-a-dee-doo-dah from "[REDACTED - THIS NEVER EXISTED - REPORT TO ROOM 101 FOR REEDUCATION]". There's some costuming and stuff in the parade for it, and a few other things too.
It's in competition with what is just a shitload of stuff now (all of Disney, all of Pixar, all of Star Wars, all of Marvel), and it's still holding its own in the park pretty well for a thing that never existed. It's not dominant, since nothing can really be dominant in a line up like that, but it's definitely there.
I remember going to Disney World as a kid and having no idea what half the characters we saw were from... Br'er Rabbit, Fox, Bear.
That was in the 90's, so before the Pixar, Star Wars, and Marvel stuff got pulled into the fold. It's good to see that there are still some characters floating around that kids have no reference for.
One thing I noticed with my kid (5 yrs old) is they enjoy repeatedly watching the same show. Even if the whole Disney catalog was available they'd probably watch the same move for days on end. At first I was encouraging trying new shows but apparently it is normal for kids to act that way. So what we ended up doing was just purchasing the movies. The trick is figure out if they'd like it. But so far we've had a good track record at guessing.
$10/month would be worth it for me but it's probably not realistic. A single movie usually costs more than that. With this plan they'd cannibalize their own media market.
> $10/month would be worth it for me but it's probably not realistic. A single movie usually costs more than that. With this plan they'd cannibalize their own media market.
Another way of being 'realistic' (not moral) is to see that 1TB hard drive is 100 bucks and can contain a thousands of Disney movies, which can be obtained fairly easily online.
They can't charge too much for something that people essentially buy out of good will rather than necessity.
> Even if the whole Disney catalog was available they'd probably watch the same move for days on end. At first I was encouraging trying new shows but apparently it is normal for kids to act that way.
I remember doing that but I thought it was because we only went to the video rental store once a week.
Hell, I do the same all the time. Honestly, there's very little number of shows or movies that bring noticeable value. So I prefer to rewatch good ones I've already seen.
Doesn't Disney already have a streaming TV service called Disney Life that does all this? It's £4.99 a month here so less then your $10/mo range. You get access to quite an extensive catalog of Disney stuff. It's a bit clunky the interface, not remembering where you were when you left. Fast forwarding is a pain. Sometimes crashing (and coupled with the not remembering and the fast forwarding is a pain, makes it a bigger issue).
Yes. You'll note a lot of writing about this from the US posing questions that ignores that we already know what this service will be like, because they've already piloted it in the UK. And they're going ahead with it because it did reasonably well.
This article already fails by virtue of going "whu, no Marvel, how do the build a proposition here?" We already flaming know.
There's a risk that Disney will screw this up, but personally it looks like something hard to get wrong. Disney has a huge library of unique, high-quality content people really want to watch. If they can put all of it — not artificially limiting the selection too much — on one service and set the price right, they should do well.
I thought that too, but the article makes a really interesting point, backed by Iger's quote, that they may not wrap Marvel and Star Wars in. Honestly, I have no desire to subscribe to their service without that IP and I doubt I'm alone. Of course, plenty of people still will, but will it be enough to make it profitable?
They bought their minority stake in BAMTech (the streaming spinoff of MLBAM) earlier this year. There’s no way they’re going to mess this up from a tech standpoint either.
HBO Go was totally redone from the ground up by the MLB team I believe and there were some hickups at the start but it has been pretty good since then.
HBO Go might be okay (I've never used it), but it's a rare day that I can watch a full episode of anything on HBO Now (Xbox One) without "We're unable to play this video right now. Please try again later". Netflix is the only streaming service which has performed flawlessly for me over and over again. You'd think it was a solved technology problem by now, but Amazon, Hulu and HBO Now still seem to have playback issues for me on a semi-regular occurrence.
Splitting from Netflix would've been genius if the idea were that they'd partner with a competitor to challenge Netflix, namely someone like Hulu or, better yet, Amazon.
Going off on their own without being part of a larger more diverse set of content could deal a serious blow to Disney. I for one would not ever pay Disney through a Disney-specific service just for streaming Disney content, as much as I like Disney movies.
Why does it have to be just Disney content? Keep in mind that even that is not just the movies, but also all of the TV content that's run on the Disney Channel.
Disney also owns Marvel, which brings all Marvel content.
Disney also owns Star Wars now, too.
Disney also owns ABC and ESPN.
One of the major complaints with all of these streaming companies is "no sports" -- imagine if Disney leveraged their sports library and technology to bring live streams to their library? How about old classic games? Best Of series?
It seems like Disney is actually in a FANTASTIC position to provide entertainment for every single person in the family.
I didn't see that. What I saw was Iger saying that they're still considering what this theoretical service may offer and whether it makes sense to have everything under a Disney brand.
A subscription for those who want to actively avoid anything non-Disney? I know that market exists, but it can't be very big. When I first read about Disney launching their own streaming subscription I was undecided between corporate hubris and me underestimating their off-brand catalog, but this seems to decide it.
What's the difference at that point if Disney's content is on Amazon rather than Netflix. They are betting that their entire catalog (ABC, Marvel, Star Wars, ESPN, etc) is worth more direct to consumer than whatever small fraction they are getting of every subscriber fee.
I don't think Disney produces enough content that could justify such a service, they have a diverse catalog but it really doesn't have the depth.
Maybe I'm weird, but I get my fix of Disney IP's by purchasing a Blu-Ray once or twice a year - I can't stand the garbage Disney puts on their cable channels (seriously, to hell with the Disney Channel and Disney Jr.), their classic movie library I won't let my daughter near, I couldn't care less about anything on ESPN and ABC. That basically leaves Pixar, Star Wars, (sometimes) Marvel and on (rare) occasion their newer films and licensed content. Why on earth would I pay $5-10/mo ($60-120/yr) when I can spend $20-40/yr on a disc or two?
Right, but you are weird, just like many of us here. Hannah Montana had an average viewership of 4-5M people. In comparison, Breaking Bad only surpassed the 2M in the last season, and Mad Men never hit 3M. And while HM is a peak, all their Disney Channel live-action show are in the 1-2M zone.
'At the same time, Disney might not even include all of its own content in the service. Iger said of Marvel and Star Wars, “We’ve also thought about including Marvel and Star Wars as part of the Disney-branded service, but there where we want to be mindful of the Star Wars fan and the Marvel fan and to what extent those fans are either overlapped with Disney fans or they’re completely basically separate or incremental to Disney fans.”'
If the only way I could stream new Marvel movies would be to go to Disney directly, I might pay per movie, or if it were cheap enough, I'd pay $7 for a single month of service to get that new movie or watch the original Tron re-engineered to look incredible in 8K one day when I'm 80 years old and have an old 8K monitor. But, I feel safe in my decision not to pay for a streaming service of only Disney content; I'm not a Zac Efron fan, though I did think Radio Rebel was Debbie Ryan's best movie.
People are getting antennas but a large reason is that most cable and network providers switched to digital only and turned off analog in the last year or two. Digital antennas are quite nice for live not avail on streaming or something like Vue.
I cut the cord in 2015 for a Vue/antenna/Hulu/Netflix alternative and Cox cable in Arizona turned off analog in 2016[1] in my area on the default wire so a digital antenna was needed. The cord cutter movement pared with providers turning off analog, and cord cutters missing live/local channels on services like Vue/Sling etc spiked the sales in antennas. Haven't used an antenna in ages and digital antennas are actually quite nice, full HD or no channel, tv static snow is dead.
One question is what happens over the long term to Netflix' Marvel shows. They're still owned by Disney, but are some of the most popular Netflix "originals."
Pulling those—or their followup seasons—over to the Disney streaming service would have to hurt Netflix.
I've watched those shows and enjoyed them but I feel like they're becoming redundant so it would probably be a good thing if netflix was forced to do truly original content. The whole superhero thing is growing stale for me anyway, and I suspect for a lot of others as well.
I have an solid antipathy against the superhero movies and I dislike that Netflix offers so many of those that it's hard to browse their non-superhero offers.
Please Disney, be greedy here, I know you can and I know you want to :)
The article mentions the realization that it's a different audience and separate from the Disney offering in general (ditto star wars). Sounds like there's a chance they leave that bit aside for different strategies.
Netflix recently bought up Mark Millar's comic book company, presumably because they've seen the writing on the wall and want to keep making super hero movies/TV shows after their current deal with Marvel ends.
Seems like Netflix is slowly chiseling a way at the TV go-to-market strategy. Also seems like there is still a lot of resistance to the single-integrated-UI problem. Still lots of paradigms, apps, and devices competing to be the accepted way to find and watch video on your big living room screen.
Distribution should be decoupled for content creation, then there is true competition and everyone wants to sell everywhere, instead of pulling content from everywhere, which only hurts end users.
That would be nice, but it's not how the world works.
I even doubt you'd be able to regulate it well. It would mean forbidding Netflix Originals, for example. Netflix would just start a legally independent production company called Fletnix and get global exclusive licenses on all content it produces.
> Netflix wasn’t simply a customer for Disney’s content, the company was also a competitor for Disney’s far more important and lucrative customer — cable TV
Remember when Sony Electronics tried to play the game Sony content companies wanted it to?
As a former Sony fanboy, Sony Electronics makes the systemic mistake of completely forgetting the customer the moment the hardware is sold (as contrasted with Apple, providing ongoing quality services that encourage more hardware purchases).
My last straw was buying a Blu-ray player that claimed glorious high quality video and lots of apps/software/content: with anticipation I had it play the included trailer for then-coming-soon movie "Salt", expecting the very best of my then-new 1080p system ... and was dismayed by a horribly grainy 320x240 video. Sony Electronics didn't give a ---- about content, even though the whole point of buying the products was experiencing content.
Aren't they basically incentivizing Netflix to enhance they own catalog? They are already on it and they certainly got my attention for getting some pretty good content out. Netflix can basically just head hunt great content creators and producers which are left out of the industry altogether.
Unless they offer their content for a fraction of Netflix subscription (which I doubt), I'm not up for supporting this disaggregation of content by each producer. Netflix already has the tech, the infrastructure, the apps, which I'm already paying for. Do I have to pay for it 2x, 3x, 4x?
Isn't solving the Live Streaming issue different that the VOD issue? I mean, I know there is a large amount of overlap, but live streaming benefits greatly from what is basically multicasting. With VOD you may have every single person watching the same thing, but at different points. I think I read that HBO also uses the company that Disney bought, so they must be able to handle VOD in some form because the weekly surge of GoT watchers is likely massive.
Why don't Disney and Netflix come to an agreement where Netflix offers a Disney-only channel? Each company can then concentrate on their core competencies: Disney can focus on creating content, and Netflix can focus on displaying it to people.
Netflix for Hollywood was just a middleman that siphoned away their profits. Disney is just removing them from the equation because they feel they can run their own streaming service and capture more value than they provide. You only use middlemen when you have to, and they decided they don't have to any longer. And this lets them charge more and give customers more value too. A $30 a month sub with access to everything makes more sense than slowly rotating old shows for a $10 sub.
Disney should make Netflix richer because they have no reason to believe they can do the following things better than Netflix: streaming gigabytes of data over the internet to millions of users, collecting payment and handling customer support.
It's the same reason that Disney doesn't operate its own movie theatres: it doesn't have any competitive advantage in this area.
Disney can offer "a $30 a month sub with access to everything" through Netflix. That is, Netflix would offer a 'Netflix channel' for $10 per month or a 'Disney Channel' for $30 per month.
Keep in mind that Netflix doesn't have much bargaining power - if they ask for more than say a 7% cut of that $30, Disney can just build their own streaming service for around 7%. Therefore it's in Netflix's interest to offer to host the Disney streaming channel for a percentage that is just a bit less than would cost Disney to build their own streaming service.
When Disney bought BAMtech (which was part of that announcement), they got just that: a battle-tested, state-of-the-art content delivery platform capable of streaming of millions of simultaneous viewers.
As for customer support, Disney has always been excellent at that. Go into a Disney store or theme park sometime for an example. Heck, they invented the "customer is a guest" service concept (outside the hotel context).
How does Disney's income break down in terms of merchandise/parks/cruises vs. eyeballs paying to look at moving pictures? If most of their income is the former, why does Disney care where or how people are exposed to their brand?
Their wiki page has some numbers for the last few years. Parks/Resorts (incl. cruises) made $3.3B in 2016; Studio Entertainment made $2.7B; Disney Media Networks (ABC/etc) made $7.8B. So if you put the TV and films together, that's roughly triple their parks & resorts.
You need to cater to eyeballs so that people keeps buying the merchandise. Disney, together with Coca Cola, are the world leaders of creating a brand that feels like an essential part of your life; and it all depends on keeping the core product relevant.
The real cash cow of Disney is actually ESPN. Trying to break down the finances to that fine-grained a level is difficult, but the category of "TV networks" as a whole is ⅓ the total revenue of Disney (more than Parks & Resorts, and more than films and merchandising combined) and ½ the profit.
Put another way, current sports is more valuable to Disney in terms of actual revenue and profit than every movie they've made in nearly 100 years of existence.
On one hand, yeah, its targeted at kids. They probably aren't savvy at online content discovery. They almost certainly aren't subscribed to the Disney XD Youtube channel when there are Spiderman vs Pregnant Elsa videos to watch.
On the other hand, they put it out for free, to anyone in the US with an Internet connection, and they got 1.6m hits.
I don't think horizontal works as a business strategy. It relies entirely on memetic effects to propagate your content because the advertising budget required to reach an entire demographic to get ubiquity is magnitudes larger than the cost of actually making the thing. There is too much content inundating people - especially children. It makes your success completely random. Did your "meme" scenes go viral? Did your intricately designed quotable character take off? Did you have those, and just get overshadowed by some other meme at the time?
We won't see the consequences for a while. It will be 10 years before the cablecutters who dropped Disney have children at a critical enough mass to dramatically limit the number of young faces in front of non-interactive screens. But when that comes, it will have consequences none of these companies traditionally built on tv viewership are ready for. And I don't even know if they can prepare.
I feel like the only real end-game solution is to cultivate a fanbase, and use them as your revenue stream - much like how music has become today. Artists don't make anything off trying to sell their music anymore, because not being on spotify and pandora is a death sentence to your relevance. You need the audience, even if they aren't paying you anything, to attract fans that want mech you can profit from.
It would be really weird to see Ducktales as a Patreon project that is getting paid by 100k supporters several millions a month, but it seems to me that is the endgame for original creative media in the long run.