How Disney is balancing entertainment and advertising sales in the age of streaming

The company will release its financial results tomorrow, which may reflect the impact of changing consumer behavior with the expansion of streaming and digital advertising.

For Disney, a media conglomerate that is a major advertiser and ad channel operator for other marketers, the shift in consumer demand for streaming is impacting everything from how it markets and distributes movies to how it interacts with brands.

Disney beat revenue expectations in the last quarter as the parks, experiences, and product segments returned to profitability for the first time since the beginning of the pandemic. The company achieved higher ad revenues on broadcast, cable, and Hulu and reached 116 million subscribers on Disney+. The findings could show how consumer shifts are starting to affect the company, with some financial analysts worried that long-term subscriber targets could be compromised.

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“Disney has been selling wholesale to a middleman for 100 years and now they have to get into the direct-to-consumer market and there are growth issues,” said John Rood, who has spent more than a decade at Disney and Warner. . Bros., most recently as senior vice president of marketing for Channel.

In recent years, media studios in Southern California and tech companies in Northern California seem to be imitating each other. The activities of Hollywood’s media conglomerates are shifting to a model based on data and DTC, as Silicon Valley giants work to establish themselves as brand builders and storytellers. The transitions weren’t perfect, and the consequences for marketers are many.

“These companies have been in the direct-to-consumer market for only about 18 months. The ‘data’ is widely published – almost as much as the ‘influencers’ – as they try to find a cost-effective way to market their products,” he said. said Red.

Disney Brand partners, assembled

As it seeks to market its film and television projects – whether shown in theaters, Disney +, or a combination of the two – Disney has embraced brand partnerships that allow other marketers to harness the power of its vast wealth of intellectual property rights. your content to different audiences at different times.

The big world of advertising platforms

In addition to the company’s advertising, Disney operates several channels that support television, cable, streaming, and digital advertising. Earlier this year, the company launched the Disney Real-Time Ad Exchange (DRAX) program platform as part of its effort to unify its ad sales across digital and linear TV screens.

Simplifying the ad-buying process across the entire Disney landscape, from ABC to ESPN to Hulu, is part of what makes media consolidation attractive to advertisers. Nearly three-quarters (73%) of advertisers surveyed for the Advertiser Insight Corporate Reputation Report said consolidation makes it easier to decide where to spend money on advertising. This is especially important as advertisers are trying to neutralize the connected TV (CTV) fragmentation that grew rapidly during the pandemic.

Although Disney Select has more than 1,000 primary segments, the company is relatively new to primary data, especially when compared to other technology platforms that sell ads, such as Amazon. However, the company is talking about investing and hiring more data than its competitors, said Rood. These moves can position you for growth as digital advertising continues to evolve.

“Disney of Southern California media conglomerates is the best at data acquisition,” he said. “In the land of the blind, the globe is king.”