Richard Plepler

In other words, Wile E. Coyote could see the cliff. And so if Disney had arrived at the edge of the chasm, it had no other choice but to dive in. By August 2017, Iger was ready to go public with a plan.

Netflix would no longer be Disney's partner, Disney's buyer, Disney's source for easy money. It would be Disney's direct competitor. There was just one problem.

So instead of having something of a streaming battle, Disney duking it out with Netflix, Disney Plus dropped into more of a streaming war.

Coming up, Disney was now a streamer. and a major player in the streaming wars. To compete, it was going to have to double down on the idea that it was both a creative company and a tech company.

In 2018, Alana Pena was just getting her start in TV.

She was working as a writer's assistant on a TV show called Crazy Ex-Girlfriend. And her new agent called her up and asked, got any show ideas? We want a comedy.

This is what it was like during the boom times of streaming.

And in 2018, these networks were starting new platforms, and so were thirsty for more content than ever before, because they were building up their arsenals for the streaming wars.

The exec did have good taste and invited Pena to come in and pitch her show, a story about a young teen.

The response to the pitch was extremely positive. Disney picked up the series the same day Pena pitched it. Gina Rodriguez was a producer, and it was called Diary of a Future President.

Disney Plus wanted to be well-stocked on content for all corners of the streaming battlefield. And so the company ordered every entertainment division to get working, creating fresh new shows like Diary and tons of shows based on existing Disney IP. And then there was all of Disney's back catalog, the movies and shows that families with kids would love to have at their fingertips.

But the streaming wars were gearing up, battles forming on every front, tons of enemies, few allies, and Netflix leading the charge with a decade-long head start. Every strategic advantage needed to be seized and leveraged. Every opportunity needed to be considered.

Disney bought 21st Century Fox in 2019 for over $71 billion, giving it 30 seasons of The Simpsons and also Avatar, the Die Hard and Alien franchises, Titanic, and also a majority stake in Hulu. All of these assets helped Disney to expand far beyond its core family brand. Here's Ben Fritz, editor with The Wall Street Journal, who covered Disney at the time.

The thinking in large part was that, look, Disney has these great brands, but they don't have a huge content library. It was not nearly as big as what Netflix already had.

For over a decade, Bob Iger spent billions on acquisitions that helped expand Disney's creative reach. But that was a drop in the ocean compared to what they were now spending to beef up for the streaming wars.

In order to compete with the Apples and Amazons and Netflixes of the world, Disney needed to look, act, and spend like them. But it also needed something else, some slack from Wall Street. Disney was spending like money wasn't real in order to build a service people would want to sign up for, just like the tech companies were. And so Iger had a pitch for investors.

The significant thing to know, Joe, is that he was telling Wall Street that you should value us based on the success of our streaming service. Value us the way you value Netflix, based on how many subscribers we get in streaming. Subscribers first, profits later. And much to Wall Street's delight, Disney Plus delivered huge numbers as soon as it launched in November of 2019. Matthew Ball.

Disney aimed to get 60 million subscribers within four years of launching.

Within just one year, Disney had over 70 million. Its virtual overnight success surprised everyone. But in 2022, after a few years of slugging it out in an increasingly crowded field, another surprise was in store for all the players in the streaming wars. It was not a pleasant one.

Yep, this comes as the company is reporting a drop in subscribers for the first time in more than a decade. It was like a bomb went off throughout the industry. If growth wasn't guaranteed, Wall Street had a new demand, profits. Streamers had to show they could make money fast.