1. Streaming, happily ever/after
DeGroote Consulting Group
Elizabeth, Chinomnso, Marley, Britney

3. ever/after
Augmented reality
Lightsaber enabled

4. How might Disney disrupt online streaming leveraging synergies in the organization?

5. Key issues

6. Changing consumer preferences
Key issues
Disrupted industry
Drastic changes within media and entertainment industry
Online streaming is growing quickly
Increased number of competitors
Importance
Urgency
Disrupted industry
Acquisition
Changing consumer preferences
Changing consumer preferences
43.6% YoY customers are leaving TV behind for internet
Customers looking for low cost and high convenience
Acquisition
Culture must be considered when merging two companies
Ability to generate maximum value from additional content
70-90% of acquisitions fail to deliver the adequate value

7. Analysis

8. Acquisition analysis
You purchased…
Fox film
Fx Networks
National Geographic
Hulu
Star TV India
39% of Sky
to get…
More content
More direct relationships with customers
Into the streaming market
Increased Indian market share
for…
$71.3b cash & stock
Key takeaway
The Fox acquisition has potential to result in significant revenue growth and enable Disney to reimagine streaming.

9. Competitive analysis
Key opportunities exist to capitalize on Netflix’s weaknesses
Inconsistency
Interactivity
Transparency
Key takeaway
To disrupt Netflix, Disney must act strategically and leverage internal strengths to attack external weaknesses.

10. Analysis of Disney’s streaming capabilities
Valuable
Disney is already generating value through existing streaming services (e.g. hulu),
however value captured in the market is indirect and not maximized.
Rare
Disney has access and control of exclusive character and content use, however Disney allows other streaming services to benefit from their rare content.
Inimitable
Disney’s current streaming services were late to market and imitated other service providers rather than building a unique experience and/or business model.
Organized to capture value
Disney is not currently organized to capture value in the online streaming market.
Key takeaway
Disney must re-organize their business and leverage existing intellectual property to maximize streaming market revenues.

11. Opportunities

12. Opportunities 1 reimagine hulu kids 2 eTheatre 3
ever/after integrated experience platform

13. 1
reimagine hulu kids
Reimagine the existing hulu kids experience with interactive Disney games and unlockable content for Disney park visitors or individuals with specific Disney products
Key benefits
Leverages existing hulu platform
Content can be exlusively used on hulu kids
Existing content enables increased speed-to-market
Knowledge and understanding of target market
Key considerations
Doesn’t improve strategic position relative to Netflix
Difficult to capture existing Netflix kids users
Only generated cash flows for limited period

14. 2
eTheatre
Develop a new direct-to-consumer release platform, eTheatre, where users can watch new Disney releases live with fans worldwide for limited time periods
Key benefits
Eliminates middle man and provides direct access to customer base
Increased margin
Increased control of user experience
Key considerations
Untested revenue model for direct-to-consumer releases only
Inability to generate ongoing recurring revenue stream

15. ever/after integrated experience platform3
ever/after integrated experience platform
Develop ever/after integrated experience platform which allows user to stream content, and engage with Disney portfolio content and characters in new ways (e.g. using augmented or virtual reality, smart devices) and transition existing hulu users to ever/after
Key benefits
Disruptive user experience enabled by emerging technology
Leverages strengths of acquisition and existing Disney portfolio content
Increased control and ability to continuously engage customers
Key considerations
Requires contingent workforce to support interim activities prior to launch
Additional content must be created to support new experiences

16. Decision matrix 1 reimagine hulu kids 2 eTheatre 3
ever/after integrated content streaming platform
Valuable ▲
Rare ●
Inimitable
Organized to capture value ▼
▲ Improves current state
● Maintains current state
▼ Harms current state

17. Preferred solution

18. ever/after
Augmented reality
Lightsaber enabled

19. mouse media ► operations ► user experience ► synergy ► ever/after
Year 2

20. Implementation

21. mouse media ► operations ► user experience ► synergy ► ever/after
Key activities
Develop new content
Market research
Innovation lab
Across all subsidaries
Year 2
media
Key considerations
Exclusivity of content
Changing media landscape

22. mouse media ► operations ► user experience ► synergy ► ever/after
Key activities
Contingent workforce
Advertisement development (interactive)
Accessory development
Investor relations
Acquire top talent from Netflix content creations team
Year 2
media
operations
Key considerations
Ad team must agree to create interactive content
Onboarding of contingent workforce

23. mouse media ► operations ► user experience ► synergy ► ever/after
Key activities
Interactive shows
Virtual reality
Augmented reality
Interactive ads (generate revenue)
Connecting users
Easter eggs to match accessories
Year 2
media
operations
user experience
Key considerations
Compatibility of accessories
Understanding customer preferences

24. mouse media ► operations ► user experience ► synergy ► ever/after
Key activities
Eliminate redundancies (increase operating income)
Create synergies between content (generate revenue)
Reverse engineer content (generate revenue)
Across all of Walt Disney Studios
Year 2
media
operations
user experience
Key considerations
Cross functional teams required
Ability to leverage content but remain distinct branding
synergy

25. mouse media ► operations ► user experience ► synergy ► ever/after
Key activities
Happily ever after
Create social medias
Allow Hulu users 1year free
Influencer promotion
Word of mouth
Ever/after enabled packaging
Year 2
media
operations
user experience
Key considerations
Entering a competitive market
synergy
ever/after

26. Investment Year 1 Year 2 media $3.5m $2.5m operations $10.6m
user experience
$5.0m
synergy
$1.0m
ever/after
Grand Total
$21.1m

27. Revenue Growth

28. Operating income

29. NPV
2019
2020
Incremental CF
$15
Cost
-$24
Rate
11%
NPV 2

30. Key metrics

31. Initial screenplay adaptation
Key success factors
factor
target
timeline
People
ever/after subscriber base
9.7mil
2 years
Customer satisfaction
90%
Profit
Incremental cashflows
15mil
YoY
Net profit margin 5%
1 years
Process
Improve inefficiencies within workforce
1% increases
1 year
Revamp key movie segment based on purchase of Fox
Initial screenplay adaptation
1.5 years $

32. Risks + mitigation

33. Risks + mitigation Netflix provides similar survey H M
likelihood
impact
mitigation
Netflix provides similar survey H M
Disney content is exclusive to ever/after platform, which is marketed as an experience platform
Customers do not want to engage in online platform due to preference for content on other services L
Ensure wide variety of content across all Disney subsidaries, conduct market research
High cost of integration across all platforms
Research and development in innovation lab to ensure integration and ease of use

34. Next steps

36. ever/after
Augmented reality
Lightsaber enabled

37. mouse media ► operations ► user experience ► synergy ► ever/after
Year 2

38. Appendix

39. Detailed costing (1/3) Year 1 Year 2 media $3.5m $2.5m
Content development
Innovation Lab
Market research
$1.0m
operations
$10.6m
Accessory Development
$2.0m
Acquire Top Netflix Talent
$5.0m
Contingent Workforce
$3.6m

40. Detailed costing (2/3) Year 1 Year 2 user experience $5.0m
Augmented Reality
$1.0m
Connecting Users
$1.5m
Easter Eggs
Interactive Ads
Virtual Reality
synergy
Eliminating Redundancies
Reverse Engineered Content
Synergies Between Content

41. Detailed costing (3/3) Year 1 Year 2 ever/after $1.0m Hulu Trial
Influencers
Social Media
Product labellinh
Grand Total
$21.1m
$2.5m

42. Video streaming market (in millions USD)
2017
2018
2019
2020
2021
2022
2023
Video Streaming Market 32
37.44
43.80
51.25
59.96
70.15
82.08
CAGR
17%
Capture 26%
26%
9.73
11.38
13.32
15.59
18.24
Ever after price 8
77.87
91.11
106.60
124.72
145.92

43. Revenue breakdown by segment
2019
2018
2017
Media Networks
$6,620
$6,156
$5,866
Parks and Resorts
$5,557
$5,193
$4,894
Studio Entertainment
$3,461
$2,878
$2,393
Consumer Products & Interactive Media
$924
$1,001
$1,085
Revenue Total
$16,562
$15,228
$14,238

44. Segment operating income as a % of revenue
Media Networks
$2,025.65
30%
Parks and Resorts
$1,488.30
26%
Studio Entertainment
$886.11
25%
Consumer Products & Interactive Media
$308.15
32%
Total
$4,708.20
IMPROVED OPERATING INCOME
12% 5%

45. Questions
Can Disney battle digital disruption and shake up the streaming market?
Can the Fox acquisition help Disney in gaining a timely advantage in streaming content wars or was it too late for it to succeed in streaming?