The “Streaming Wars” began with lofty promises of unlimited access to fan-favorite shows and movies without the commitment of traditional cable bundles. Yet, as the battle matures, the industry’s heavy hitters—Netflix, Disney+, Amazon Prime Video, Paramount+, and HBO Max—are beginning to separate into clearer winners and losers.
In a twist that might surprise industry insiders, Disney+ is struggling to hold its position as a major contender in the space.
Disney+ entered the market in 2019 with the unique advantage of an unmatched catalog, including Marvel, Star Wars, and Disney’s classic lineup. However, several core challenges have restrained Disney+ from capitalizing fully on its intellectual property (IP):
A “Binge and Bail” Problem
Disney+ has encountered a wave of “binge-and-cancel” customers. This common issue across streaming services may now become even more challenging, as new FCC regulations aim to streamline subscription cancellations.
The service’s reliance on hit series — like the $75 million they paid for exclusive rights to Taylor Swift’s Eras Tour documentary — and films has inadvertently made it easier for viewers to complete what they want to watch within a short trial period and move on.
Though Disney+ did get a respectable 4 million subscribers enrolled that quarter that the company has kept on, the company is still down over 10 million subscribers from its 2022 high of 164.2 million.
Limited Legacy Customer Base
Disney+ lacks the established infrastructure that competitors like Netflix and Amazon built over decades.
While Netflix initially grew as a DVD rental company before moving into streaming and enjoyed a nearly decade-long run with little competition.
Though Amazon technically predated Netflix, the e-commerce giant didn’t become a real player in the space until 2012-13 when it started acquiring high-profile streaming rights.
By then, Amazon Prime already had over 25 million subscribers and was in the early stages of steady, powerful few years of growth.
Disney’s pivot to streaming, while bolstered by its brand recognition, did not come with an extensive digital consumer base, adding friction to customer acquisition.
Content Exclusivity Constraints
Unlike Netflix, which licenses external films and series to diversify its offerings, Disney+ focuses on in-house content and historical inventory.
The appeal of multiple franchises under one subscription is formidable, but Disney’s exclusive content model has proven restrictive for budget-conscious viewers who may only afford a single streaming subscription.
Moreover, Disney’s reputation as a family-oriented, kid-centric media company does limit the types of content it can venture into, despite the fact that it’s core audience is one of the industry’s most lucrative.
Meanwhile, nothing is stopping other streaming services from targeting Disney’s audience base.
Public Relations Hurdles
Disney has also faced high-profile legal controversies that risk alienating some subscribers.
For instance, the company recently attracted criticism after it attempted to dismiss a wrongful-death lawsuit tied to its theme park based on a technical clause reportedly related to Disney+’s terms of service.
While not directly related to content, such moves highlight the complexities of combining brand divisions under one overarching identity.
The Black Widow Lawsuit Fallout
Disney’s Black Widow controversy underscored the tension between streaming and traditional cinema, where Disney has found its fortune.
By shifting to a streaming-first release model, Disney ignited a lawsuit from leading actress Scarlett Johansson.
Johansson argued that Disney’s pivot deprived her of anticipated box office revenue. The company’s swift, critical response to Johansson—despite the pandemic’s impact on theaters—sparked backlash from both talent and fans, raising questions about the streaming model’s long-term implications for creative partnerships.
“Ms. Johansson agreed that her compensation for starring in the latest motion picture addition to the Marvel Cinematic Universe (“MCU”), Black Widow (the “Picture”), would be based largely on “box office” receipts generated by the Picture. To maximize these receipts, and thereby protect her financial interests, Ms. Johansson extracted a promise from Marvel that the release of the Picture would be a “theatrical release.” As Ms. Johansson, Disney, Marvel, and most everyone else in Hollywood knows, a “theatrical release” is a release that is exclusive to movie theaters,” the complaint reads.
Netting Losses in the Streaming Wars
Despite showing a quarterly profit earlier this year, the platform’s future remains uncertain.
With more consumers facing a saturated market and tightening budgets, Disney must now demonstrate that its content lineup and brand recognition can translate into sustainable profitability.
Disney’s potential paths forward include appealing to cost-conscious viewers or exploring new content strategies to retain subscribers long-term.
Once speculated as a potential buyer, Disney now finds itself struggling to keep up with Netflix, whose market cap has soared beyond $300 billion in this year.
As the industry landscape shifts, Disney may yet find a way to recapture streaming dominance—but it will need to innovate and adapt to succeed in this stage of the Streaming Wars.
