Disney+ isn’t a streaming service. It’s a merchandise goldmine

Forget about the streaming wars. Disney+ may be doing a good job of bringing its guns to bear on Netflix – but the real prize is already in its grasp. Since Disney launched its streaming service in the United States, Canada and the Netherlands in November 2019, it’s been gaining ground on the 160 million subscribers Reed Hasting’s service has taken 20-plus years to amass.

Disney’s official figures say 28.6 million people have signed up in its first three months. Unofficial estimates have confirmed the service’s instant hit status: analytics firm Sensor Tower said that between launch and January, Disney+ had more than 40 million downloads on mobile devices, generating as much as $100 million (£77 million). With similar growth, the service can expect to gain a strong foothold in the UK, Ireland, France, Germany, Italy, Spain and other European countries, where it launches on March 24.

However, subscriber numbers and the regular monthly revenue they bring to Disney are relatively insignificant. For the company, the ability to control its image is key. “Disney has always liked to keep control of its own intellectual property – and that’s going back to the late 1920s,” says Amy Davis, a lecturer at the University of Hull’s School of The Arts, and author of several books on the impact of Disney. She is surprised it took the company so long to launch a streaming service around the world. (Its first crack, DisneyLife, launched in Europe in 2016 and offered mostly classical films).

With Disney+, the firm can control how and where all of its shows are watched. It no longer needs to sell the rights to its franchises – Star Wars, the Marvel Cinematic Universe, Frozen, The Simpsons and more – to other TV networks or streaming platforms. In the build-up to the launch of Disney+, the company went through the slow process of removing its films from Netflix as licensing deals expired.

It gives Disney total power over its own image, something it did not have when it relied on other services to distribute what it had created. Johanna Gibson, a professor of intellectual property at Queen Mary, University of London, asks: “Will they still broadcast on other networks? Or will they just control everything and other networks will become irrelevant in that respect?”

Disney has been keen to emphasise the streaming service isn’t just a place to dump old content. Like other streaming platforms, it’s making exclusive shows: Star Wars spin-off The Mandalorian, the highest profile to date; Toy Story 4 character Forky in his own series; a High School Musical spin-off; and The World According to Jeff Goldblum, a reality series where the star explains how things are made and their histories.

Disney is pouring huge sums into creating new series and movies that will live exclusively on Disney+. There are seven Marvel series in the works. All these new shows present Disney with a new opportunity: more merchandising. “Disney+ is obviously going big on franchises,” says Rebecca McGrath, a senior media analyst at the Mintel Group. “We’re expecting Disney+ to really bolster Disney’s merchandise presence.”

Through its theme parks and stores, selling a vast array of branded products, Disney has been able to capitalise on the intellectual property it owns. There’s huge money to be made from merchandising. In 2015, it was estimated that the Star Wars franchise had made around $12 billion from toy revenue since the first film was released in 1977, and $4 billion from box offices.

New characters and spin-offs from its existing franchises getting more screen time on Disney+ creates a chance for more merchandising and greater brand affinity. “People will still get that nostalgia experience of Marvel, but it also means that characters that didn’t necessarily get the development during the films will still have screen time,” says Robyn Muir, a researcher at the University of Nottingham who specialises in Disney.

Disney+’s big hit, so far, is Baby Yoda, as The Child from The Mandalorian has been dubbed. The character, no direct relation of Yoda but from the same species, was a huge hit online. Memes of the character quickly spread through Twitter, Facebook and Instagram. Look at the Disney store and you can find multiple versions as soft toys and figurines – all providing revenue for Disney. The company only needs to create a few new hit characters, from old or new shows, to bring in millions of extra dollars.

“Disney’s good at picking up on what’s become popular or anticipating what’s going to become popular and merchandising it,” Amy Davis says. Over the last few years, the amount of merchandise has swelled. YouTubers, the Conservative Party (which sold Brexit merch) and even Netflix have moved into the space.

Disney itself has struck deals for Mickey Mouse to appear on Gucci handbags, costing from hundreds of pounds to £1,500. McGrath says the appetite for merchandising will only increase as streaming services proliferate. We might have stopped buying DVDs, but our hunger for merch is only growing stronger.

Matt Burgess is WIRED’s deputy digital editor

You can sign-up to Disney+ now for just £49.99, which is a limited time offer. Read our guide to the best Disney Plus TV shows and films to see what you’ll get with your subscription.

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