The Battle Over Children's Programming
In the current M&E landscape, it’s hard not to take in consideration how COVID-19 has impacted the entertainment industry. Of course, we all feel the effects of this-- especially families with younger children. To top off other concerns, adults are scrambling to figure out how to entertain and occupy their loose children who are no longer in school. As the rising usage of streaming during this time of crisis indicates, people are implementing the timeless parenting tactic of plopping children in front of the TV to pass the time. As this brief will lay out, recent developments from the streaming giants show the value and unfolding battle for dominance in the children’s programming market.
Disney+
Disney+’s launch in 7 European markets this week (going live just four months after its U.S. launch) is very well-timed, as the UK and other parts of Europe enter lockdown to quell the coronavirus. For reference, it took Netflix nine years to begin its push for international expansion in 2016 -- having launched its streaming service in 2007. It’s also noteworthy to consider that with the Disney-theme parks taking a major hit from COVID-19, this expansion of Disney+ is vital for Disney’s business portfolio. This sudden release of Disney+ might not have happened had the COVID-19 crisis not occurred. However, any difficulties that Disney+’s quick international launch might bump into is largely counterbalanced by the increased demand for children’s programming. Disney’s move to leverage global children’s programming early on gives the streamer a very large advantage against competitors in this valuable market (as I will break down next).
The Competition:
Netflix
With its hugely popular content library and competitive pricing, this move by Disney+ positions the platform as a strong threat against current streamer-goliath Netflix. First, as companies continue to pull important IP from Netflix to put on their own streaming services, even if Netflix creates new original series, it’s unlikely that it will keep them at the top against already established children’s programming.
Another strength of Disney+ against Netflix is the more affordable pricing in global markets. Cost converted to USD, Disney+ has a flat subscription rate of $7/month globally. This is compared to Netflix’s adjusted subscription fees throughout Europe. For example, Netflix costs $10.91/month in the UK and $13.42/month in Italy. Disney+’s European launch gives these countries more options in what they can subscribe to. The cheaper pricing for Disney’s top titles against Netflix’s may be more appealing to buyers.
Amazon
Another streamer development this week was that Amazon made all of their children’s programming free (temporarily), compared to how these titles were only accessible before through an Amazon Prime membership. However, I don’t believe that Amazon is trying to compete with other streamers for dominance in the children’s programming market. Instead, I think the incentive behind this is a ploy for Amazon to gain more Prime subscribers in general. Amazon’s streaming service barely scratches the surface when it comes to the company’s revenue. However, as Amazon makes the most of their money through sales and Prime memberships, their leveraging of the children’s market is a great way to draw in more Prime customers. Once the Coronavirus crisis dies down and Amazon makes people pay for popular children’s programming again, people will be incentivized (through their children) to subscribe to a Prime membership -- just so their children can continue to watch these titles.
HBO Max
I have high hopes for HBO MAX. With the entire WarnerMedia catalog at their disposal (i.e. recognizable IP-- like all of Cartoon Network), exclusive U.S. streaming rights to Studio Ghibli content, and an in-house studio for more original programming, HBO MAX is a strong contender against Disney+ when it comes to already-established top children’s programming. Yet, there is still a glaring issue: this platform has not even been released yet. Therefore, it’s hard to come to any conclusions on how HBO MAX might fare against their streamer competitors.
Conclusion
Now, you might be thinking: so what if Disney+ snatches the crown in the children’s programming market? There’s still content for other age demographics. Amongst all other content, I believe that children’s programming is the secret weapon for streaming services to keep subscribers. Though streamers continue to pump out a diverse range of original content that might gain critical acclaim and then draw in more viewers, there is more incentive to keep a subscription service that the buyers’ children want. Have you ever tried to argue with a 10-year-old Peppa Pig superfan? Parents are more willing to spend money to meet their children’s demands for popular programming, rather than sift through Netflix’s overwhelming original content and deal with their own content-paralysis. Especially in the tumultuous entertainment landscape going on right now, all the halted productions give even more power to the tried-and-true content libraries (such as Disney’s). Once the world bounces back from the coronavirus, I wouldn’t be surprised if Disney+’s head start of global expansion makes the platform a top player in the streaming wars.