Disney Adapts To The Evolving Entertainment Industry -12/18/19

From the Simplr studios in San Francisco, this is your daily briefing.

Introduction

This is Today in Five, for today, Wednesday, December 18th. Here's today’s headlines in digital disruption.

As we enter a new era of entertainment where streaming services online is becoming a more popular alternative to cable subscriptions, Disney has made key strategic moves to stay at the top of the market. But is it enough to compete with players like Netflix and Amazon?

First, here’s what’s making headlines.

Mobile Shopping Dominating in Fashion Retail

According to a report, mobile phone shopping accounted for nearly 67 percent of traffic for fashion retail sites and 52 percent of sales. Mobile conversion rates increased by 53 percent since last year’s holiday season. Recent reports have indicated mobile shopping is a crucial element to holiday shopping this year, with BounceX predicting that consumers would shop more on mobile than desktop and another report from BillTrust indicated more than half of shoppers planned to shop via mobile devices for gifts this year.

Lyft Launching Car Rental Service

Ride-hailing company, Lyft, announced that it’s launching its own car rental service. The service is available in the company’s main smartphone app and will work like traditional car rental companies, starting in the San Francisco Bay Area and Los Angeles. Uber previously entered the rental space with a partnership with car-sharing company Getaround, but shut the program down at the end of 2018. Both Uber and Lyft have also rented and leased cars on their platforms in the past, but Lyft’s new service is the biggest attempt at taking a bite out of the rental car market, which is dominated by just a few players who are already trying to prevent losing customers to ride-hailing companies.

H&M Reports Stronger Sales

H&M reported stronger quarterly sales, indicating that the fast-fashion retailer’s efforts to adapt to changing consumer habits and increased competition are starting to pay off. The company reported a 9 percent rise in fourth-quarter sales and its shares climbed almost 2 percent. H&M has relied on selling low-price apparel in bulk but is now overhauling that strategy as consumers shift to online shopping, where the brand faces fierce competition from digital-only rivals. The company is now speeding up its supply chain and stocks its stores more efficiently through customer data analysis to stay competitive in an evolving consumer landscape.

Disney Adapts To The Evolving Entertainment Industry

Media companies have faced many challenges as more people stream content over the internet instead of paying for cable subscriptions, but Walt Disney has managed to stay on top in the movie business. The company released six of the eight highest-grossing films so far in 2019, with titles like Avengers: Endgame, The Lion King, and Toy Story 4 helping it reach $10 billion dollars at the global box office. Disney’s success can ba party attributed to a series of strategic acquisitions over the past decade. In 2009, the company bought Marvel for $4.3 billion dollars. The deal came shortly after Disney purchased Pixar for $7.4 billion dollars. And in 2012, Disney acquired Lucasfilm for $4 billion dollars. The company’s acquisitions have paid off, with Disney’s box-office haul representing over 30 percent of money made in the U.S. film industry in 2019, up from 11 percent in 2009 according to data from Comscore.

But as Disney enters into 2020, it’s facing a dramatically changing media landscape. Competitors like Netflix, Amazon, and Apple have upped their spending on content and created a fierce streaming war, with all platforms vying for a share of consumers’ wallets and Hollywood talent. Disney has made moves to retain its competitive edge in the new streaming age. In the last year, it closed a $71 billion dollar acquisition of 21st Century Fox’s entertainment assets, launched Disney+, gained control of Hulu, and released the highest-grossing movie in cinematic history, Avengers: Endgame.

With its first 24 hours, Disney+ had 10 million sign-ups, and analysts predict the company will hit 20 million subscribers before the end of the year. Bob Iger, Disney’s CEO, has said that within a year of Disney+’s launch, the number of original shows and movies will go from 10 to 45. He also noted that within five years, there will be more than 60 original projects on the service. The company is also forecasting it will have between 60 million and 90 million subscribers by the end of 2024.

While Disney+ has had a strong launch, it still remains to be seen if it will be enough to compete with Big Tech companies in the long run. Iger has also announced he will be stepping down in 2021, leaving uncertainty around who will lead the company in this new era of entertainment. In the last decade, Iger has helped grow Disney’s market cap from $60 billion dollars to more than $265 billion dollars.

Closing

Thanks for listening to this latest episode of Today In Five. Don’t forget to subscribe and leave us a review. I’m Vincent Phamvan, and we’ll see you tomorrow.