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How Disney Thinks About Streaming Churn, Bringing ESPN DTC, and When to Create Local Content

Jason Gurwin

Disney Plus has reached nearly 95 million paid subscribers by the end of 2020, but now that they have all those users – they have to think about keeping them.

When asked about churn on their 2021 Q1 Investor Call, Disney CFO Christine McCarthy said, “we are very pleased with what we’ve seen so far on the level of churn. And as our product offering matures, and we put more content into the service, and our subscriber base becomes more tenured, we expect to see our churn rates continue to decline.”

In addition, in regards to customers converting from the Verizon promotion, she said “we’re really happy with the conversion numbers that we have seen there going from the promotion to become paid subscribers.”

In Late January, Verizon CFO said, “more than 2/3 have maintained their subscription, either through their Verizon direct billing relationship or by opting into one of our newest Mix & Match plans with the Disney bundle included.”

One area that streamers have leaned into is live sports. While ESPN+ is part of the Disney Bundle, people are looking for way to get the content from ESPN’s linear channel.

Given the decline in the Super Bowl, Chapek says that “we’re looking at the long-term trends of sport’s viewership and our own prospects of potentially a more true ESPN DTC service. So there is a lot of moving parts and elements in that mix.”

Part of reducing churn, is also making sure there is content designed for every market.

In order to improve the experience in each market, the company said they plan to continue to invest in local content. How they decide what to create, Disney CEO Bob Chapek said it comes down to requirements in local markets and what they think they need for their portfolio. He also said that they’re “aggressively ramping up all of our production for all our local territories.”

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