Advances in Social Science, Education and Humanities Research, volume 631

Proceedings of the 2021 International Conference on Social Development and Media Communication (SDMC 2021)

The Streaming Service Under Pandemic with the

Example of Performance of Disney+
Yaqi Jia1,*
1
University of Toronto, Rotman Commerce, Toronto, Canada
*Corresponding author. Email: [email protected]

ABSTRACT
Today, most people cannot live without streaming services especially in the Big data age. These streaming services
bring us to a more convenient, effective, and wonderful world. Observations for the performance of the streaming
service under pandemic with the example of the performance of Disney+ which is a streaming platform created during
the pandemic. This paper uses online data to analyze these performance. These streaming services increased the
financial situation of their company and Disney+ helped Disney during the hard period. This paper will analyze how
the streaming services are able to influence the world potentially.

Keywords: pandemic, streaming service, Disney+

losers of others. Among the biggest losers, of course,

1. INTRODUCTION have been restaurants, live music venues, the travel
sector, and the meeting industry, all of which have had
More and more modern people start to use streaming to cease or seriously scale back their operations during
service to watch videos, read articles, and so on. The the pandemic in the interest of public health. Only now,
specialty of streaming service became especially with multiple vaccines in hand, is relief on the horizon.
obvious during the pandemic, when almost all the other However, while some industries are in trouble, others
business service and products are facing unavoidable are booming. One of the biggest winners has been
large loss. These streaming service connected people streaming media–television shows, movies, and video
with each other and become the most popular working games broadcast on-demand to their screens, 24/7.[1]
and playing way during the pandemic. During the
pandemic, without leaving room, people can know what For more than a year, people all over the world have
happen around the world and how does the pandemic been taking refuge in places with nowhere to go and
go. They can also make small videos and post out to the nothing to do. For many of them, their only advantage is
public space to share their mood.People also experience their high-speed Internet connection and cloud, which
a hard time to live such as buy clothes and food they makes it possible to access work, friends, and
want, but streaming services also give them the chance entertainment through streaming video in new ways.
to do these necessary activities online. However, in the past year, discerning consumers faced
with a dizzying array of choices have focused their
This paper will focus on how the world is changed attention on which platforms are suitable for them—and
by the streaming service during the pandemic and with which platforms are not suitable for them. In 2020, as
the example of how Disney+, one of the streaming more streaming media platforms try to open up space
service created by Disney, influence the stock price on for themselves in niche categories, competition in an
Disney. This gives a clearer picture of the importance of already saturated market will become more intense. The
streaming service during the pandemic. streaming media ecosystem is now clearer than ever. For
example, as more and more people use video
2. ANALYSIS conferencing to connect with colleagues and relatives,
Zoom has flourished. However this is only the tip of the
2.1. Overall view of streaming services iceberg of streaming video. Streaming services such as
Netflix, Hulu, Disney+, Apple TV+, NBC's Peacock,
COVID-19 has made winners of some industries and and HBO Max have become a reliable way to alleviate

Copyright © 2022 The Authors. Published by Atlantis Press SARL.

This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/. 815
 Advances in Social Science, Education and Humanities Research, volume 631

isolation and boredom, while the live broadcast platform Global streaming consumption has continued to soar,
Twitch is a godsend for online gamers. states the report, the results of which are included in
companies’ own data. Netflix, for example, reported
Parallel to the pandemic, there have been numerous
attracting 15.77 million new subscribers in Q1 2020, a
streaming video services launched by such major
23% increase over the same period in 2019. At the end
studios as Disney, Universal, and Warner Bros, with
of last year, there were over 200 million globally paid
Netflix NFLX +0.5%, Hulu, and Amazon AMZN -0.7%
members, 37 million of whom accepted the service in
joining and competing. By 2020, revenues for digital
2020, including 8.51 million in the last quarter alone [1].
entertainment will be $61.8 billion, a 31% increase over
2019. In terms of theatrical and home entertainment However, most of these streaming services have not
revenue, digital media accounted for more than three yet been cost-effective, but their losses
quarters. Since 2019 digital revenue has increased by are well below what they were a year ago. Direct to
82%, compared to 55% in 2020. In 2020, digital revenue Consumer revenues were up 73% to $3.5 billion, while
is expected to account for 82% of revenue from theatres, operating losses were down from $1.1 billion to $466
TVs, and mobile.(Adgate, 2021) There is a report million. The company stated that it does not expect
Nielson published in April 2020 that stated that Disney+, Hulu and ESPN+ to make a profit until 2024.
streaming video time from services such as Netflix, Revenue at Disney Media and Entertainment
YouTube, Hulu, and Amazon Prime Video more than Distribution fell 5 per cent to $12.7bn, while operating
doubled compared with a year ago (Streaming services income fell 2 per cent to $1.45bn [1]. Among the
have accelerated during COVID-19. will this continue?, company's other divisions are its streaming and movie
n.d.). business, and its television and movie licensing
business. Despite the impact of Coronavirus on Walt
In fact, Americans spent 44% more time streaming
Disney Co.’s profits, Disney +’s popularity reduced the
media in the fourth quarter of 2020 than they did in the
pain. This achievement enabled Disney to comfortably
fourth quarter of 2019, streaming media intelligence
beat Wall Street's waning expectations, allowing the
company Conviva reported in its most recent “State of
company to boost its stock price. For the quarter ended
Streaming” report [1].
Jan. 2, the home-entertainment giant reported adjusted
The average American uses 3.6 streaming services, earnings of 32 cents per share, down from $1.53 a year
according to a Harris survey in the Wall Street Journal in earlier. This marks a significant drop for the company,
late 2019. This number can be observed to continue to but not the loss investors anticipated. As a result,
rise as the streaming market expands to include new Disney’s revenue decreased 22 percent from $20.9bn to
models such as subscription video on demand, $16.2bn. Disney made a profit of $17 million in the
advertising video on Demand (AVOD), transactional fourth quarter, which is still a modest improvement over
Video on Demand and now high-end video on Demand $2.1 billion a year earlier, but still significant. in the
accessed through Disney + 'where people can watch same period a year earlier [1].
movies for a limited time. (Streaming trends in Canada
are like those in the United States, with “approximately 2.2. Exampled with Disney+
41% of Canadians using a streaming TV service daily”,
according to a 2020 report by market data firm Statista.) A spokesperson for COVID-19 gave a statement
This highly fragmented model confuses and confuses saying that the new rule caused theme parks to close,
consumers, but also presents opportunities and cruise lines to disrupt operations, Broadway shows to
challenges for multi-video platform devices like stop, and movie theatres to close. An estimated $2.6
YouTube TV or top-tier devices like Apple TV, Roku, billion in operating income was lost due to the closure,
and Amazon Fire. These companies now have to figure resulting in deeply painful conditions for the families
out how to integrate this market and make money from affected. Though some setbacks have been experienced,
the simplicity of their products and one-stop shopping. Disney has managed to weather these disruptions, and
its share price has continued to climb to record levels
To make matters even more complicated, during the despite delays in film releases and parks that are closed
COVID-19 pandemic, live sports took a break and more or sparsely visited. Investors remain focused on the
athletes and sports supporters played video games in strong growth of its streaming services, particularly
their free time, with video games and sports experienced Disney Plus. As of January of this year Disney+
significant growth during the preceding period. Global members have reached 100 million subscribers after
broadcast hours for Twitch almost doubled in the second launching its streaming service in November 2019 that
quarter to 5 billion hours, according to Streaming Data includes Marvel, Pixar, National Geographic, Disney
Analytics Company Stream Hatchet Streaming and more. Despite Disney's prediction that it would take
platforms and services are not only competing with one five years to reach 90 million subscribers, its rapid
another, they are fighting for the free time as well. acquisition of paying subscribers has stunned analysts
and even Disney.

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Disney+ was the clear winner in the streaming and algorithmic models are expected to grow in the
competition except for Netflix in its first year. As future. These patterns determine whether a platform can
outlined in the company’s earnings release, revenue of entice users to click on the next video, song, or movie
$14.7 billion exceeded analysts’ expectations of $14 recommendation, thereby extending their engagement
billion, while earnings per share were down 20 cents time. These recommendation engines will become an
versus expectations of 70 cents. In December 2020, 86.8 important means of generating traffic in the short term.
million users were on the platform, a number that Despite streaming being an over saturated market
increased to 94.9 million the next quarter [5]. In consumers are not likely to abandon streaming anytime
addition to the second season of The Mandalorian, soon. As traditional media and traditional broadcasters
Disney has credited streaming service on becoming an enter the digital transformation era and be able to
attractive platform for new subscribers. With Disney's success in their digital transformation journey, they must
multiple services such as ESPN Plus and Hulu, all understand streaming and how it fits into their
together, it has 146 million subscribers. transformation strategies. Streaming has become an
integral part of the media landscape and traditional
On revenue of $15.92 billion, analysts expected a
broadcasters need to have more understanding of these
loss per share of 38 cents, and over 90 million users are
trends in order to successfully integrate them into their
expected to subscribe to Disney+. According to
digital transformation journey. In an era where
Disney’s latest statement, its streaming service now has
consumers’ time is being consumed by an increasing
nearly 95 million subscribers, compared to 86 million in
number of platforms, it is vital to think about strategies
December of 2020 [1]. Moreover, Disney’s (NYSE:DIS)
for how to capture and retain their interest. Digitally
CEO also announced that its streaming business debuted
absent companies ought to check out the opportunities
with 146 million paid subscriptions at the end of the
found on these platforms. As for Disney+, although it
third quarter, which includes services like Hulu, Hotstar,
has immense popularity this year, it still needs a lot of
ESPN+ and more. Its stock rose 3% after hours
effort before it can become profitable. “Moffett
following the release of its earnings [3].
Nathanson, a media research firm, estimates that Disney
The earnings report presented by Disney on + will likely lose $2 billion to its parent company this
Thursday was mostly predictable, and it further year and another $2.2 billion in fiscal 2021” [2]. Disney
highlighted the importance of Disney+ to the company's expects its services to become profitable in the fiscal
health. In after-hours trading on the report, Disney year 2024. Media analyst Michael Nathanson of Moffett
shares rose about 3 percent before settling slightly Nathanson also stated that Disney+ and the rest of
lower. Disney’s direct-to-consumer assets like ESPN+ and
Hulu are the most important assets in terms of investors’
Despite all its challenges, Disney has not giving up
eyes, according to CNN Business. “It is a source of
on its parks, so Chapek emphasized that it was working
long-term growth and offsets (factors like cord-cutting
on new global attractions themed to “Ratatouille”,
and shifting audience behavior). Following the
“Guardians of the Galaxy”, and “Zootopia”. Likewise,
announcement that Disney+ has now surpassed its own
the hiatus has also caused the company to consider ways
goal of having 100 million subscribers since November
to boost its productivity.
2019, Disney+ has achieved something of a
We believe streaming is heading towards a bright breakthrough. Achieving the same subscriber number
future due to the fact that streaming still remains the has taken Netflix NFLX +1.4% ten years. Amazon
primary distribution platform and delivery method for AMZN +1.9% Prime Video, which competes against
content to homes and devices. Price has become more rival streaming services, has 147 million global
important for consumers now that there are so many subscribers, while rival streaming services have 203.7
options available, and this is why AVODS have million subscribers. According to Disney, as it is on the
increased in number to help offset the costs for rise in streaming, it is targeting 260 million subscribers
consumers. Since Avods such as Roku TV, Pluto TV, by 2024. Furthermore, a whopping $15 billion has been
and Crackle have demonstrated their success, we can earmarked for Disney’s content budget [5].
expect this model to continue to grow.
In comparison to last year, Disney has said it expects
There is also a great opportunity for reaggregation to add more than 100 new titles to the service annually.
for a corporation in the streaming space in the face of Getting more subscribers will be greatly facilitated
market saturation. Due to consumer acculturation, the through this. Since launching, Over 4,500 hours of
more unified and straightforward the solution, the higher content are available on Disney+, while Netflix has
the likelihood of grabbing their attention. The demand 40,000 hours and Amazon has 50,000 hours. Richard
for MVPD subscriptions has decreased significantly Broughton, an analyst at Ampere Analysis, believes that
over the past year, so we expect to bundle and bundle Walt Disney DIS -2.6% will dominate the streaming
services more effectively as well as offer more wars [5]. “Disney+ has proven itself to be one of the
affordable prices. Furthermore, the significance of data fastest growing subscription video services in the world;

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congrats to them for becoming such a global force so ACKNOWLEDGMENTS

quickly”. The fast growth and milestone achievement of
Disney+ was unprecedented when it is still only half the I have been helped a lot from the professor, families
size of Netflix, said Broughton. In addition to a robust and the online information. Sincerely, thanks for all
schedule of content throughout the rest of 2021, these helpers.
Disney+ boasts a wealth of new programming that will
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